Swimming in Black Ink
A prudent Clinton budget carries seeds of red ink
If Washington were a squirrel that's just been thrown a big bag of acorns, it could (1) store them, (2) hold a feast, (3) bury them in the ground to grow new trees, or (4) go back for more acorns.
President Clinton's proposed $1.8 trillion budget tries to do all four at once, taking advantage of this era of big government surpluses.
His budget would (1) pay down the national debt, (2) create new spending programs, (3) provide an income tax cut, and (4) raise other kinds of taxes.
The president's plan for debt liquidation by 2013 and shoring up Medicare and Social Security are easy steps that deserve wide support.
But a prudent squirrel should not assume the economy will do well enough over the next 10 years to produce the extra $746 billion in non-Social Security revenues that Mr. Clinton expects. The Federal Reserve chairman, for one, warns against such a big assumption.
And with dozens of new programs being proposed by an exiting Democratic president - such as expanding health insurance to the poor parents of children already covered by a new federal program - the nation may be locking itself into spending that could balloon in decades ahead.
Many of his proposed programs appear aimed at boosting the campaign stance of Vice President Al Gore against both his Democratic challenger and a Republican opponent.
It's as if President Clinton, who's generally been a fiscal conservative for seven years, wants to leave behind an "Old Democrat" legacy while tossing his chosen successor a life line.
But these are topsy-turvy times in Washington, which is still uncertain on how to play black-ink politics. Ronald Reagan's tax cuts forced Democrats to become anti-deficit, but now budget surpluses are luring them back to pre-Reagan habits of spending. And Republicans, still stuck on Reagan-size tax-cutting, can't seem to live with budget caps or careful planning for a slower economy.
Fortunately, the long economic growth has reduced the impact of the federal budget. As a percentage of the gross domestic product (GDP), spending has fallen from a high of 23.5 percent under Reagan to only 18.7 percent in fiscal 1999.
As a GOP Congress chews on the Clinton budget, it should keep that percentage in mind, avoid election-year grandstanding, and work on a budget compromise that doesn't assume surpluses are here to stay.
(c) Copyright 2000. The Christian Science Publishing Society