ROANOKE TIMES
Copyright (c) 1995, Roanoke Times
DATE: Wednesday, December 27, 1995 TAG: 9512270114
SECTION: EDITORIAL PAGE: A9 EDITION: METRO
SOURCE: L. DOUGLAS STRICKLAND
DURING this period of examination in Congress on the direction of federal spending and deliberations, the following issues deserve priority attention and inclusion. The principles should provide common ground for those in Washington and elsewhere who would seek to find direction in this important debate.
Priority issues of concern:
Our nation's debt is nearly $5 trillion (80 percent of which has been added in the last 14 years); without substantial change, an additional trillion will be added by the year 2000. Our nation has not achieved a balanced budget since 1969.
Fourteen percent (more than $220 billion) of our annual federal budget must be used just to pay interest on money previously borrowed; because of this interest payment, our nation can only use 86 percent of our federal budget for other needs.
The so-called trust funds set up to receive contributions from Social Security and Medicare are filled with IOUs (not dollars); these funds will have to be replenished, most likely by increased taxation.
Current proposals include tax breaks while deficit spending continues, a situation that clearly resembles the 1980s when taxes were reduced but spending cuts never implemented, which produced a large percentage of our present debt.
Government's need to fund its annual deficit by competing for limited savings in our country drives up interest rates from 1 to 2 percentage points on loans for houses, automobiles, etc. It reduces the supply of capital that could be used to modernize machinery and equipment and improve infrastructure, simultaneously stimulating economic growth and jobs, increasing productivity and making our nation more globally competitive.
Any surpluses available in Social Security and other trust funds are being treated like general revenue and spent as quickly as they come in to fund the deficit. They are not being invested for the future of these programs, and are used like general revenue in current plans to achieve a balanced budget; if agreed to, they will not truly produce a balanced budget by 2002.
Some opposed to changing Medicare demagogue the issue by identifying as cuts attempts to slow the rate of growth in this program (from 11 percent to 6 percent per year), thereby generating fear and making rational debate more difficult. (Why should Medicare be allowed to grow at 11 percent per year with inflation and gross domestic product growing at about a fourth that rate?)
Our largest federal program, Social Security - larger than defense spending in second place and interest on the national debt in third - is not even on the table in the balanced-budget considerations. Yet the program consumes 20 percent of the annual budget and faces an uncertain future.
Perhaps of greatest concern: Payment of the enormous debt generated since 1969 (and mostly since 1982) will have to be repaid by our children and our grandchildren whose future is already projected at a reduced standard of living and one potentially without Social Security, Medicare, and other beneficial social programs because of our short-term focus and tendency to protect self-interest over program interest.
It is time we as citizens:
Resolve to overcome the 25-year-old deficit-spending cycle at the federal level to strengthen our economy, reduce the interest-payment cost and free up funds for more productive uses, and take steps eventually toward reducing our growing national debt.
Encourage and permit elected congressional representatives and bipartisan groups to work toward the protection and long-term solvency of valued social programs, especially Social Security and Medicare.
Act first as citizens of our nation rather than as members of special-interest groups as we deal with these issues.
Recognize that our annual deficit and national-debt problems are shared responsibilities requiring shared sacrifice to be faced by all citizens.
Commit to finding ways to handle our generation's debt rather than passing it along to our children and their children.
Expect congressional representatives and governmental agencies to be aggressive in ferreting out fraud and abuse in the expenditure of tax dollars, and to eliminate duplicating or wasteful programs.
Seek to rekindle and promote the spirit of individual responsibility upon which we as a nation are strengthened.
Enhanced commitment toward these ends, I believe, will stimulate economic development and job creation, reverse the trend toward a declining standard of living, preserve valuable social programs, and offer greater hope for our country and a far brighter future for our children.
L. Douglas Strickland, a member of The Concord Coalition, is director of the Roanoke Valley Graduate Center.
LENGTH: Medium: 87 linesby CNB