Sacrifice: the Key To Deficit Reduction
IT will be a tragedy of the first order if Congress does not agree on a credible deficit-reduction program before its summer recess. This must not be allowed to happen.
When Senate Majority Leader George Mitchell (D) of Maine was asked the other day about Americans being ready to sacrifice, he answered that he couldn't be sure. Yet look at the response of United States citizens to the floods in the Midwest; neighbor helping neighbor, all the while the concept expanding of who the neighbor is. Deep in the American psyche there is still the desire to help, to come to the aid of others.
Why then the reluctance to accept even a grain of sacrifice in this deficit-reduction program? The answer lies partially in the poor record of Congress in handling fiscal matters. But it also is partially the fault of those who elect the Congress: you and me.
The public still does not sufficiently understand the weakened economic position of the US resulting from quadrupling of the deficit under the "watch" of the last two Republican administrations. Even the Clinton plan does not go far enough. It only hopes to erase one-third of the deficit that would otherwise accumulate during the next five years. Since much of the pain would be felt after the 1996 elections, even it is a promise that future Congresses can break.
There are many elements to a solution; the interplay of enough of them, as the president is attempting to do, spreads the so-called sacrifice. But in at least two areas it would seem that the administration and/or the Congress has caved in much too quickly. Ross Perot wanted to raise the gasoline tax by 10 cents a gallon for each of the next five years, ending up with a 50-cent hike. To settle for 4.3 cents in a nation with the lowest gasoline taxes already, on grounds that a higher tax would injure a sm all number of Western drivers is to say that the immensity of the problem - that is, the effect of continuing deficits - is still not comprehended. Figure out how far you drive a car to work, even in Denver or Los Angeles. At 20 or 25 miles to the gallon, the extra tax still works out to only a few dollars a week.
Another area in which the administration caved into pressure was the effort to end or curtail the automatic cost-of-living adjustments in so many entitlement programs. This is almost surely going to be done within the next five years. If the problem is there, why not have the courage to face up to it now?
There have been other mistakes in the handling of the program. It is, at best, awkward to have a job-stimulus bill combined with a deficit reduction program. Most of President Clinton's job ideas have considerable merit. But combining them, as he has, only gives bait to the Republican's "tax and spend" line. Then, quite apart from economic issues, the president has squandered much goodwill and valuable time by getting mixed up in the gay rights issue.
The point is that we have come down to the wire on deficit reduction. The markets have been acting in anticipation of a major event ever since January; if they were to be disappointed over an inability to act in Congress, the reaction would be powerful and negative.
If the president is to be an effective leader in the next few weeks, he must focus on the main issue - a credible package. Given the fact that 85 percent of the budget is comprised of entitlement programs, defense (where the Republicans claim he has cut too deeply already), and interest on the debt, there are only two major pieces to look at: reining in the entitlements, and taxes.
If the focus is clear enough, he can accomplish the job. If the program that becomes law is not credible to those who do their arithmetic, the job won't be done. Let us hope it gets done.