Congress should try to fix the deficit left by the deficit fixers
WARREN Rudman is right. The American Congress ought to be able to cut the deficit more decisively than its leaders and the White House have recommended. Despite three years of warnings that more substantial action is needed, President Reagan and Congress are still basically throwing babies over the back of the troika to slow down pursuing wolves.
In some ways, they are literally throwing babies. By failing to take more decisive short-term and long-term action, they are robbing the next generation rather than ask temporary sacrifices from the current generation.
It is, after all, the current generation which has reaped the benefits that caused the deficits, and the huge increase in national debt relative to national production.
Those benefits were not fairly distributed. Benefits seldom are. But elected officials ought to be paying attention to both kinds of fairness: (1) How the pie of subsidy and taxation is cut for today's citizens. (2) How sacrifices and benefits are balanced between current citizens and their children and grandchildren.
Given those guidelines, a deficit-cutting plan that achieves part of its goal by selling off federal assets is clearly not creating a long-term solution.
It's unrealistic to expect 535 legislators to be more decisive than their leadership, which wrestled for a month on the compromise announced Nov. 20. It's probably unrealistic to expect Mr. Reagan to yield more than his lieutenants did in the relatively un-public bargaining of the past month.
But, unrealistic or not, it will be useful for Senator Rudman and other forthright political leaders to make an attempt to improve the deficit package wrought by their peers.
One reason to do so is to try to force the issue into public debate during the presidential campaign.
It's conventional wisdom among politicians that he who talks about tampering with entitlement programs for the middle class (and wealthy) or talks about consumption taxes, is committing political suicide.
But it is also clear from the history books that the greatest presidents, prime ministers, and legislators were those who dared to ask their citizens for equality of sacrifice to achieve a common goal.
The sensible, tough-minded Rudman (a New Hampshire Republican) is just such a blunt-spoken leader. Perhaps he can win enough support, if not to change the deficit package next month, at least to inspire tens of thousands of citizens to let the presidential candidates know next year that they want more than vague pieties on the deficit-debt issue.
What is it that Rudman and others in and out of Congress are urging?
Not soak the social security pensioners. Not soak the rich. Not soak the poor. Simply that Americans be willing to limit slightly the amount of cost-of-living increases in entitlement programs (including social security) for long enough to help close the deficit gap. That should come alongside equivalent further cuts in defense spending, and limits on inflation-indexing of tax benefits. Any such plan should be applied with exemptions for the poorest Americans.
To a wealthy social security beneficiary (or a military or civil servant retiree) who complains that such a minor halt in the pension escalator isn't fair, one can only reply that millions of private sector retirees get only sporadic COLA adjustments to their pensions, if any at all.
A more decisive calendar of deficit cuts is needed in order to move the national debt back into better balance with national production. The deficit itself ought to be brought back to 1.5 or 2 percent of total national product by the early 1990s. If hard, sizable steps begin to be taken back down the deficit ladder, the Federal Reserve can safely lower interest rates further. And Washington can more logically argue that the other major industrial nations should also lower their interest rates.
Both moves would stimulate manufacturing, jobs, and housing in the private sector as action shrinks (or really rises more slowly) in the government sector.
Otherwise, a further fall in the dollar may be expected. Inflation, so long defied, could be fed by the weaker dollar. The Fed would again need to raise interest rates. And that would leave Washington's deficit negotiators with a hollow victory. They would have saved a fraction of a COLA for some, at the cost of more inflation or higher interest rates for all.
Inflation and high interest are two forms of taxes that don't have to be voted on a roll call. But no one wants them in the near term. And no one wants mega-debt to keep fueling economic weakness into the long-term future.
Past generations worked on the frontier, in the sweatshop, and in the great post-World War II rebirth to build what Americans enjoy today. Voters should not find it hard to pass on at least as secure a future to the next generation, their own children.
Earl W. Foell is editor in chief of The Christian Science Monitor.