Budget Charade

September 19, 1990

If the stalled budget summit is any criterion, American voters have it just about right: The Democratic Party is "incapable of governing America successfully and unclear on what it should stand for." The Republican Party is "the political instrument of the nation's rich and powerful."

These results from a Times Mirror opinion survey finding that "both parties have declined precipitously in the public's estimation" ought to be sobering to all politicians engaged in trench warfare over the soaring federal deficit. The performance of congressional and White House negotiators in ten days of inconclusive haggling at Andrews Air Force Base served only to burnish unflattering imagery.

Republicans battled furiously for President Bush's bid to cut capital gains taxes, a proposal they conceded will enrich the wealthy while supposedly creating jobs and economic rebound. Democrats were all for sticking it to the upper classes but perversely opposed increased Medicare charges for the affluent elderly, the richest cohort in the whole population. Stereotypes triumphant!

In the end, some kind of budget compromise will result. It might come just before Oct. 1, when the Gramm-Rudman law ostensibly kicks in with mandatory cuts of more than $100 billion, or just before Oct. 15, when those cuts ostensibly begin to take effect, or sometime after Election Day.

What is involved is an elaborate political ritual that is obviously not fooling the electorate. With the presidency in GOP hands, the Republicans seek President Bush's cherished cuts in capital gains taxes. Democratic leaders counter with populist demands for higher taxes on the wealthy. Both parties will get something they can claim as a victory. Capital gains rates will be lowered; effective income taxes on the affluent will go up. And the resulting compromise to cut the deficit by $50 billion, a sum much smaller than deficit increases projected since last January, will do little to rescue the United States from its economic morass.

Nevertheless, the budget summit still can get some things going in the right direction. We are encouraged by an apparent readiness to impose higher taxes on energy, cigarettes and alcoholic beverages. We applaud efforts to promote investment and make the tax code fairer.

Most politicians engaged in budget negotiations know a creative upheaval is needed. But, as former Commerce Secretary Peter G. Peterson has written, they are "terrified of doing the right thing." If they study what the public really thinks about them, they might become a little braver.

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