Keep the Deficit Target
ON returning from Congress's Fourth of July break, Sen. John Breaux (D) of Louisiana got it right when he said that when it comes to deficit-reduction targets, "Nobody back home is saying: `Guys, it's got to be $500 billion, not $400 billion.' "
No one awaiting a summertime trim at our local barber shop is talking specific federal budget-deficit targets either. But implicit in Senator Breaux's comment is a willingness to consider a lower target. And while that willingness may not be widely shared at the moment, it could become more tempting to contemplate if the budget reconciliation process bogs down.
Lowering the target would be a mistake.
Begin with the target itself. The projected $499 billion deficit reduction over five years is based on comparing the tax and spending provisions contained in the House and Senate budgets against projected spending and revenue trends without the plans over that period. But viewed another way, the projected gains are less impressive: This fiscal year's budget is expected to show a deficit of slightly more than $300 billion. The deficit in the final year of the plans before Congress is on the order of $200 billion - only $100 billion less than this year's.
All this assumes the dubious: that the economic forecasts underlying the budget match what actually happens. And the largest deficit reductions are projected for the end of the period, when even the best economic forecasts are at their least reliable. All the while, the revenue in the budgets will fall short of spending, so deficits remain and the federal debt increases, albeit at a slower pace.
Given the economic uncertainties in budget projections, the impressive-sounding $500 billion target is a minimum - although necessary - effort at deficit reduction.
Politically, retreating from the target would be unwise.
Democrats so far have been unable to counter Republican accusations of "taxing and spending." Once a final budget emerges, it may be easier for Democrats to take the offensive in explaining their package. So far, the best the Republicans have come up with are proposals that project five-year deficit cuts of between $410 billion and $445 billion. The economic grounds these stand on are just as shaky as those for the Democrats.
But if Democrats retreat on their target they will hand Republicans additional ammunition for 1994 and beyond and reinforce the already-strong impression among the public that Congress is ineffective in dealing with the nation's problems.