Budget Is First Step In Tackling Deficit
WHEN the current struggle over taxes and spending is over, probably today, it will not really be over.
Keeping the federal deficit under control will be a continuing effort in coming years to control spending, especially on entitlements such as health care, said Leon Panetta, Office of Management and Budget director, at a Monitor breakfast yesterday.
"This $500 billion deficit-reduction package is clearly the first step of many that are going to have to be taken in order to control the deficit in the long term."
"Obviously, the spending side is going to be the principal focus in the future," Mr. Panetta says.
He does not foresee many more efforts to raise taxes "with regard to deficit-reduction."
But he also adds that in dealing with the many problems before him, the president needs "every tool available to him in trying to confront those problems."
Panetta finds further evidence that President Clinton's package is good for the economy, in the way that the bond market fluctuated Wednesday over the ups and downs of whether the White House could muster the Senate votes for passage. The administration, and some bond-market analysts, credit Mr. Clinton's plan with playing a role in lowering current interest rates.
The American public will like the plan better after it takes effect, Panetta says. Confidence should grow this fall as people register that the federal government achieved a deficit-cutting economic plan, he says, "that we, at least, have had the will to discipline ourselves."
"You're not going to see, under any circumstances, I think, the kind of dramatic shoot-up in the economy that we've seen after past recessions," he cautions. Americans, at this time, are too wary to spend and invest that confidently.
"We want to restore a slow, steady confidence that we have regained some control over our economic future," he says.
While many in Congress have promoted stronger attacks on federal spending than Clinton's package contains, Panetta says such proposals simply fail to win sufficient votes.
If the president had offered a bold initiative, such as freezing cost-of-living adjustments for Medicare and Social Security, he "might have established an image of going after that kind of spending," Panetta says, but he would have lost the chance to build a coalition that could actually pass a bill.