Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: FRIDAY, February 26, 1993 TAG: 9302260493
SECTION: EDITORIAL PAGE: A-9 EDITION: METRO
SOURCE: PETE V. DOMENICI
DATELINE: LENGTH: Long
THE GOP'S OFFER PUTS CUTS BEFORE MORE SPENDING
THE WEEK before President Clinton unveiled his budget plan, Republican leaders sent him a letter applauding his commitment to deficit reduction, and offering to work with him to forge a real deficit-reduction plan focusing on spending restraint.I was one of those who signed the letter, because I agree with President Clinton's call for real, long-term deficit reduction to preserve the long-term health of our economy. Severe deficit growth is draining the strength of America. It's a drag on our economy and is devouring resources needed to spur growth and improve the lives of all Americans.
Republicans want to keep our economy moving to sustain the current expanding economy and bring recovery to those areas of the nation still mired by slow growth. We feel pain and pressures of the unemployed or underemployed. We want to improve their plight by removing barriers to economic growth, to create millions of good, family-wage jobs that will last. Deficit reduction is a key component to our plan.
The president effectively outlined the deficit's malignant threat to American's future. I commend him for his willingness to address it. His speech last week was, in many ways, encouraging. But the devil is in the details - and as the details unfold, it's clear his program isn't nearly as inspiring as his speech. While there are some details I certainly can support, overall I am disappointed.
The president has asked the American public to support his plan. He's told the people what he reasons it will do. Let me tell you what my reading has concluded.
We have yet to see two of the biggest portions of this deficit plan - the proposed $186 billion in unspecified defense cuts and the health-care reform package (which is likely to cost, not save, money). But, regrettably, it's clear his program thus far will not halve the deficit in four years. It doesn't make the permanent, lasting reductions in federal spending Americans know are needed to solve the problem over the long term. In fact, if his plan is enacted, the deficit will drop only slightly for a four-year period and then increase again.
Under the president's "vision of change for America," the deficit, which stood at $290 billion in fiscal 1992, would fall to just $241 billion in fiscal 1998. After four years of "sacrifice" beginning in fiscal 1994, the overall deficit would only be $50 billion less than last year. Moreover, deficits would then begin climbing again, reaching $400 billion by the turn of the century. This would occur even with passage of President Clinton's tax proposals - the largest tax increase in American history.
Earlier this year, Budget Director Leon Panetta testified the administration wanted to slash $2 in spending cuts for every $1 in increased taxes. But that ratio has evaporated. Now we have a plan that emphasizes new spending, heavy tax increases and few real non-defense spending cuts. But using the administration's own numbers (with net spending cuts of $123 billion and net tax increases of $277 billion), the president is now proposing $1 in tax increases for 44 cents in spending cuts.
Why are these massive tax increases on American workers necessary?
Last week, administration officials - much like the Claude Raines character in "Casablanca" - feigned "shock" over rising deficit estimates to justify tax increases on the middle class. In fact, higher deficits have been obvious since the Congressional Budget Office revised its estimates last August, nearly three months before the election.
Dramatic tax increases will not spur new private-sector job-creation. Excessive taxation chokes job creation and may well snuff our economic recovery. Increasing the tax burden on businesses - especially small businesses - will not help create the millions of new jobs we need and that President Clinton has promised. Moreover, in a budget that professes to stress honesty, the president reclaims $123 billion in savings over the next five years that were already achieved in the 1990 budget agreement. As part of a bipartisan approach to deficit reduction, I voted for some tax increases to get those spending cuts - I shouldn't be asked to vote for some more taxes to get the same cuts again!
The Clinton proposal also claims interest savings and debt-financing savings as reductions in spending. Excluding these alleged spending savings, only $11 billion comes from real reduction in domestic-spending programs during the next five years, and most of that money comes from questionable management savings.
During the fall campaign, Clinton put forward a much different package. In his book "Putting People First," he promised "the most dramatic economic-growth program since the Second World War." He also pledged to cut the deficit in half over the next four years and ensure that it continues to fall each year thereafter. He vowed to eliminate taxpayer subsidies for narrow special interests and to get rid of spending programs that no longer serve their purpose. He summed up his view of government with the following:
"We can no longer afford to pay more for - and get less from - our government. The answer for every problem cannot always be another program or more money."
More than anything else, he campaigned on a theme of putting people first by increasing job growth, generating higher-paying jobs and reducing taxes on the middle class. Thus far, his plan puts government first, not people.
Many of us, including Republicans, want to help President Clinton achieve his campaign objective - to create new, permanent private-sector jobs while reducing the tax burden on working Americans.
The stage is set. After a yearlong national campaign dominated by debate on the deficit, Americans are clearly ready for "real" deficit reduction - not false hope. We cannot afford to squander this opportunity.
But we should not start this effort by spending nearly $18 billion on a stimulus for an economic recovery well under way, coupled with another $160 billion for "investment" (spending) programs. The administration has fended off those who claim its programs rely too heavily on taxes and not enough on spending cuts by saying: "Be specific." Okay, let's start by not spending this additional $178 billion!
President Clinton has embarked on a nationwide sales campaign to try to persuade the American people to "buy" his budget plan and its higher taxes. Working Americans are now being told that for as little as $17 a month in higher energy taxes, they can put a down payment on a balanced federal budget and a secure economic future. But like so many advertising campaigns, what you see is not what you get.
I believe we can do better. The president says he doesn't care who gets the credit for deficit reduction. Neither do Republicans. He says he's ready for bipartisan cooperation. So are we. Our offer still stands.
Pete V. Domenici of New Mexico is the ranking Republican on the Senate Budget Committee.
The Washington Post