Pushing for an economic policy distinct from the Clinton administration’s and one he may banner as a presidential candidate, Rep. Richard Gephardt, the House minority leader, says it is OK if the budget is only in “rough balance” because the nation’s top priority should be investment and growth.
In an interview this week, Gephardt belittled what he described as the “obsession” of the administration and the Republicans with a budget that is strictly in balance.
To help pay for the public investment that Gephardt considers essential to more robust growth, he would endorse a deficit up to 1 percent of the gross domestic product.
“I think getting people to understand rough balance is important,” Gephardt said. “Your personal budget is not in strict balance. You borrow money to buy a house, to buy a car, to buy an appliance, to buy a camera, to buy a lot of things that you think are important to your family and its success.”
The governments of all the major industrial nations except the United States use a percentage of their gross domestic product in judging whether budgets are out of hand. Most consider them sufficiently in balance if their deficits are less than 2 or 3 percent of the GDP.
In the current effort to balance the budget to the dollar, neither the administration nor anyone in the Republican-controlled Congress has invoked the GDP standard as a legitimate alternative.