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

DATE: THURSDAY, May 11, 1995                   TAG: 9505110069
SECTION: EDITORIAL                    PAGE: A18   EDITION: METRO 
SOURCE: 
DATELINE:                                 LENGTH: Medium

FINALLY, A SPECIFIC DEFICIT-KILLING PLAN

IN ITS ZEAL to balance the federal budget by the year 2002, the plan unveiled Tuesday by Senate Budget Committee Chairman Pete Domenici sometimes does too much, and sometimes in the wrong places. But on two big points, the plan deserves piles of praise.

First, Domenici is reasonably detailed in identifying proposed spending cuts. With one notable exception, he has eschewed the empty tactic of setting future spending "caps" without specifying the spending reductions necessary to meet them. (Alas, the exception - Medicare - is a huge one.)

Second, the New Mexico Republican has refused to join the tax-cut bidding war engaged in by House Republicans and, to a lesser extent, President Clinton. If the goal is a zero deficit, the idea of tax cuts before spending cuts is strange.

The Domenici plan's attention to detail is admirable, but how admirable are the details?

Democratic criticism has focused on Domenici's proposed reduction of Medicare entitlements, to the tune of $256 billion over seven years. On this, the Domenici plan is weak in its punting of the details to a proposed commission. Clearly, though, something must be done about Medicare lest the system (or the country) go broke before the end of the decade; Democratic lamentations - with an eye to the senior vote - do little to solve the problem.

Indeed, the plan's biggest flaw is not, as Democrats would have it, that entitlement spending would be cut too much. The flaw is that too little would be cut.

Social Security, for example, remains politically sacrosanct, untouched in the Domenici plan as in the House GOP plan as in any plan very many Democrats are apt to agree on. At the moment, Social Security is running a surplus - but not enough to cover demands to come as the Baby Boomer generation begins retiring.

Perhaps even more egregious is the bipartisan reluctance to end farm subsidies. In Iowa recently, Clinton pledged to defend them. The Domenici plan, though cutting it some, retains the program. A plausible nonpolitical case for subsidizing agribusiness has become virtually impossible to make.

The GOP plan also holds defense spending inviolate; never mind that significant cuts could be found without threatening national security.

Because fast-growth entitlements are politically protected, while $25 billion is added to currently projected defense spending, the Domenici plan must turn to the slow-growth and relatively small part of the federal budget - nondefense general operations - for further hits.

Spending cuts here are more politically palatable, and often make sense. Reorganizing the hodge-podge Commerce Department out of existence, for example, or privatizing the Federal Aviation Administration - both envisioned in the Domenici plan - might well produce savings without significant loss of essential services.

But other points in the Domenici plan - cutting back on Head Start, skimping on infrastructure development, allowing national parklands to continue to deteriorate and ignoring the need for new investment in basic scientific research, to name a few - reduce America's prospects just as surely as chronically huge budget deficits do.

Indeed, there's no magic in a perfectly balanced budget. The challenge is to reduce the deficit in a manner least harmful to the future.

by CNB