DATE: Wednesday, August 20, 1997            TAG: 9708190011

SECTION: LOCAL                   PAGE: B11  EDITION: FINAL 

TYPE: Opinion 

SOURCE: Glenn Allen Scott 

                                            LENGTH:   82 lines

POLITICS CONGRESS AND STATE CANDIDATES FOR GOVERNOR DUCK REALITIES GROWN-UPS ARE EXPECTED TO ACT IN A TIMELY MANNER, NOT TEMPORIZE, WHEN CONFRONTED WITH DIFFICULT CHOICES.

U. S. Sen. Ernest F. Hollings denounces the ballyhooed ``balanced budget'' agreement as ``a fraud.'' South's Carolina's junior senator is right, of course.

Grown-ups are expected to do their duty. President Clinton and the Republican-controlled Congress are preening themselves for producing a plan that they say will soon bring federal revenue in line with federal spending and thus end a long string of budget deficits.

Yes, the outlook is for a much smaller deficit of none in the near term. The economy is strong. Inflation is in check. Tax revenue cascades into the U.S. Treasury.

In short, the feds are in the money. So Clinton and Congress could agree on a budget that contains tax cuts and promises sufficient revenue to balance income and outgo. This is a sort-of-welcome prospect after the long series of unbalanced budgets, beginning during the Ronald Reagan presidency, that ballooned the national debt to the trillions.

But shrinking the deficit would be a truly welcome prospect if the budget agreement set spending and revenue on a course promising to produce more-or-less-balanced federal budgets for many years. That's not the case.

For example, much of the tax revenue flowing into federal coffers as if there were no tomorrow is attributable to major tax increases that strike the pocketbooks of mainly upper-income Americans. These include the top 1 percent whose collective after-tax income in 1994 equaled the collective after-tax income of the bottom 35 percent of the population (according to the Washington-based Center on Budget and Policy Priorities).

The tax increases that are helping to push the federal budget toward balance were voted when Democrats controlled Congress - the first increase during Republican President George Bush's term, the second after Clinton took office.

The tax cuts contained in the so-called balanced-budget agreement could reverse the process. They benefit well-off taxpayers far more than anyone else; what the middle-, lower- and low-income taxpayers will save is pocket change by comparison.

Yet really easing the tax burden on struggling Americans would do more for this consumer-driven economy than lightening it on Americans who (1) aren't struggling and (2) reap the greatest benefits from U.S.-government muscle and programs. The overall tax load (federal, state, local) borne by low-, middle- and upper-income taxpayers, runs about 30 percent of income. Who is handicapped more by the 30 percent?

Meanwhile, the budget agreement also postpones moderating spending increases on Social Security and Medicare. Since expenditures on these programs will soar, budget deficits are set to explode in future years. Economic downturn could also deepen the deficit. Rising expenditures and lagging revenues will spell very bad news.

The 200,000-member Concord Coalition, the nonpartisan organization founded to build public support for federal fiscal restraint, is especially concerned about Washington's failure to bring Social Security/Medicare under control.

Former Republican 2nd District Rep. G. William Whitehurst, who has been a Concord Coalition champion since the organization's founding, stopped by the editorial department last week with a couple of coalition volunteers to deplore the budget botch.

Deficits have been excessive since the 1980s. We can expect more of the same if the budget agreement is the bomb that many believe it to be. With the Baby Boomers turning 50, increased demands on Social Security and Medicare can now be foreseen. Meanwhile, the Baby Busters and Generation Xers in the labor force will be hard put to support the growing number of retirees. So fewer workers will be supporting more and more retirees. Yet the challenge is being ducked.

Unfortunately, Washington has no corner on ducking responsibility. Virginia's candidates for governor are talking tax cuts when they should be talking how best to provide schooling for the state's youngsters that will fit them for well-paying instead of ill-paying work and underwrite construction, repair and improvement of highways and expand mass transit. We aren't talking frills. We are talking about what must be done to ensure Virginia's competitiveness against neighboring states in the global economy.

Grown-ups are expected to act in a timely manner, not temporize, when confronted with difficult choices. Grown-ups are not expected to neglect their duty and thus leave to others the even tougher choices when pain is acute and doubly costly to alleviate.

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