
                         Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: MONDAY, May 2, 1994                   TAG: 9405030019
SECTION: EDITORIAL                    PAGE: A6   EDITION: METRO 
SOURCE: 
DATELINE:                                 LENGTH: Medium

POLITICALLY HARD

MUCH OF the federal deficit could be eliminated via sensible budget cuts. Sensible, but politically difficult, because the middle class would be hit.

Which, again, goes to the dirty little secret of budget policy: The national debt isn't the result of spending too much on poor people or foreign aid; it is much more the result of spending on non-poor people - from millionaire corporate farmers who receive agricultural subsidies to affluent Social Security and Medicare recipients whose benefits aren't means-tested.

Assuming, however, that Congress won't wipe out the national debt by spending cuts alone, here - from the Congressional Budget Office - are a few obvious ways to raise revenues:

Pushing up the gasoline tax 10 cents a year for five years would bring in an extra $127 billion over five years. And prices at the pump would still be less than half what Europeans pay!

Limiting itemized deductions to 15 percent (instead of the figures twice as high or even higher that some rich taxpayers use) would raise an estimated $274 billion over five years.

Capping mortgage interest deductions at $20,000 a year for a joint return and $12,000 for an individual would raise some $32 billion.

These measures, along with higher cigarette taxes to help pay for health-care reform, would go a long way toward cutting the debt. Will they be enacted? Don't hold your breath.

Still, the opening of a local Concord Coalition chapter, and Sen. Charles Robb's frank talk, are welcome signs in a season when attention to deficits is diminishing. Indeed, good times are the best time to go after the deficit - certainly better than in hard times, when federal spending rises uncontrollably.

The economy right now is strong enough to absorb spending cuts or tax increases. And fiscal brakes on the economic expansion would be preferable to the monetary brakes that the Federal Reserve has been applying to guard against resurgent inflation.

by CNB