Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: FRIDAY, March 24, 1995 TAG: 9503240084
SECTION: EDITORIAL PAGE: A-12 EDITION: METRO
SOURCE:
DATELINE: LENGTH: Medium
Sign No. 1 is the dissent of 102 House Republicans from their own party's plan for a $500-per-child tax credit for families earning up to $200,000 annually. Capping the income limit at $95,000, say the dissenters, would mean "an additional $12 billion to $14 billion in savings for deficit reduction."
That doesn't go far enough. Other aspects of the package still would tilt the tax-cut goodies toward the wealthy at a time when the first priority should be deficit reduction. Better to forget about tax cuts altogether until deficits are firmly under control.
Nevertheless, the division within GOP ranks is an encouraging indication that the difference between sound-bite sloganeering and the responsibilities of power is beginning to sink in with many in the new House majority. The hard truth is that budgets have two sides, revenues as well as expenditures: Cutting the latter simply to offset cutting the former does nothing to staunch the flow of red ink.
Sign No. 2, also welcome, is the news that the deficit from Oct. 1, 1994, through Feb. 28 - that is, the first five months of the current federal fiscal year - was 20 percent less than for the same period a year earlier, which in turn was less than the year before that.
If the rate of 20 percent were to continue, this year's deficit would drop to less than $170 billion, well below 3 percent of America's gross national product. That isn't bad, particularly in light of the fact that 16 percent of federal outlays must now be devoted simply to servicing the debt accumulated from the '80s and early '90s. But it isn't good enough.
First, the improvement is due not only to budget decisions of the Clinton administration and previous Congresses, but also to a rebound in the general economy that shouldn't be expected to continue indefinitely. Second, if entitlement commitments under current law go unchanged, the deficit will resume its rise in a couple of years.
Only when the debt as a percentage of overall national economic output is firmly on a downward course can federal debt-service levels drop to a comfortable level. This is not yet happening.
Welcome signs are still only signs. For genuine trailblazing, the badge goes neither to President Clinton, whose currently proposed budget plan fails to match the anti-deficit progress of his first two years in office, nor to the 102 House Republicans, whose first steps toward getting out of the woods remain hesitant and incomplete.
The badge goes, rather, to those - in the House, a small band of centrist Democrats including L. F. Payne of Virginia's 5th District; in the Senate, a bipartisan group that may come to include both Virginia senators - with the gumption both to support spending cuts and to oppose tax cuts.
by CNB