Social-program advocates worry about war's cost DESERT STORM/ The home front

January 24, 1991|By John Fairhall and Laura Lippman | John Fairhall and Laura Lippman,Evening Sun Staff

WASHINGTON -- The desert war looms like the Great Sphinx over the federal budget, worrying advocates of social programs. "I think for the foreseeable future the war is likely to much other congressional activity on domestic political concerns," said Paul Leonard, an analyst with the private Center on Budget and Policies Priorities.

Donald Johnson, a policy analyst for the Maryland Food Committee, said the war "definitely will have an adverse effect on the federal level, then trickle down to the state."

Members of Congress and budget experts caution that the war's impact on domestic programs ultimately will depend on two variables, its cost and how it's financed.

Cost estimates range from "under half a billion dollars a day," the number given by Federal Reserve Chairman Alan Greenspan, to as much as $750 million a day, as Rep. Leon Panetta, D-Calif., chairman of the House

Budget Committee, suggests.

The war can be financed three ways: by diverting funds from domestic and defense programs; by raising taxes; and by borrowing the money. Thus far, Congress and President Bush are treating the war as an added cost to be covered by borrowing, without affecting domestic or regular defense programs.

But if the war continues for months, congressional calls for a tax increase are likely to mount.

House Speaker Thomas Foley, D-Wash., said yesterday on ABC-TV that while there are no plans now to raise taxes, "it would be a mistake to put this entire cost on the next generation" through borrowing.

Yet, no matter what the cost of the war, experts and lawmakers agree this is going to be a difficult year anyway for domestic programs. The recession, the cost of bailing out banks and savings and loans, and last year's restrictive budget agreement rule out major initiatives.

"It's a tough time and it's going to be a tough time and we ought not kid ourselves," said Maryland Rep. Steny H. Hoyer, D-5th, chairman of the House Democrat

ic Caucus.

The multiyear budget agreement reached by Congress and the administration places strict limits on appropriations.

For Maryland and other states, facing their own budget crises and scrambling for federal funds, the gulf war is clearly a threat. But opinions vary about the effect of the war.

"My impression is it's not going to have any impact on domestic spending," said Kenneth Mannella, deputy director of Gov. William Donald Schaefer's Washington office.

"My understanding is the budget agreement is intact," he said. "That being the case we would anticipate domestic spending would follow the path laid out, which would be last year's level plus inflation."

But private advocates for the poor and some lawmakers say that in addition to its possible financial impact, the war will divert attention from social issues.

Esther Reaves, executive director of the Metropolitan Churches Community Association, says the war

bumps social issues to a lower priority for many people. "The homeless were second-class citizens to begin with. They're worse than that now. In the long run -- just when the need is greatest [a year from now] -- there's not going to be any money."

"Obviously if you're focused in terms of the war," Hoyer said, "it's very difficult to concentrate now on what happens in the field of education, health care, infrastructure, the field of environment, all sorts of competing items that are due critical attention."

"But as Governor Schaefer says," Hoyer said, "it is not time to fold up our tents, and wring our hands and go around nay saying."

In the short run, President Bush will submit his budget on Feb. 4, and congressional budget committees will go to work. Then, in "March, April and May we're going to have to make some very tough decisions on what our capabilities are," Hoyer said.

"We all hope the gulf war will be over by then and we'll have some handle on what our projected costs are going to be."

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