New ideas or merely old politics?

William Schneider

February 21, 1991|By William Schneider

REMEMBER Bruce Babbitt? He's the former Democratic governor of Arizona who ran for president in 1988 with a dramatic new idea to reduce the budget deficit. Babbitt proposed "means-testing" of federal programs so the benefits would go only to people who needed the money. Guess where Babbitt ended up: back in Arizona. Guess where his idea ended up: in President Bush's fiscal 1992 budget proposal.

In his State of the Union address last month, Bush said the new budget process Congress implemented late last year will be "a battle of ideas, not a bidding war." What kind of ideas? The administration says its budget promotes fairness, empowerment and federalism. But a lot of it looks suspiciously familiar: spending cuts, tax cuts and means-testing. What looks like new ideas may just be old politics.

The budget proposal challenges the Democratic Party's claim to the "fairness" issue. It makes changes that are designed, the document says, "to counter the contention that 'fairness,' of necessity, means more federal spending rather than more-effective targeting of spending to reach those in need."

For instance, Medicare premiums have never been based on the ability to pay. Bush is now proposing that individuals with incomes of more than $125,000, and couples with incomes of more than $150,000, would pay substantially higher premiums. The administration also wants to take away crop subsidy payments from farmers who earn more than $125,000 a year in nonfarm income.

Benefits paid to survivors of military personnel would no longer be based on rank. School lunch subsidies would be increased for students from poor families and reduced for students from higher-income families. Grants for college students from needy families would be increased at the expense of grants for students from families that are better off.

All this is intended to put Democrats on the defensive. "It will be somewhat ironic," budget director Richard G. Darman said, "if the Democrats, who are expressing concerns about fairness, are reluctant to reduce subsidies for the wealthiest Americans."

It certainly sounds fair. But means-testing is politically dangerous. Entitlement programs are, by definition, not based on need. You are paid a benefit because you belong to a category -- and anyone can belong to that category. Anyone can get old, anyone can go to public school or college, anyone can join the military services. And, supposedly, any real American can be a farmer.

The only social programs that are politically secure are those that are available to everybody, like Social Security and Medicare. Catastrophic health insurance didn't work because it taxed the well-to-do elderly to pay for benefits for the low-income elderly. That didn't sound like an entitlement program. That sounded like welfare, and the easiest way to destroy a program is to turn it into welfare. Then it loses its middle-class constituency.

In the name of federalism, the administration wants to turn $15 billion in federal programs over to the states in the form of consolidated block grants. Bush hailed the "innovative power of states as laboratories." But what a lot of states are these days is broke. Governors welcomed the new money, particularly because the administration promised that no state would lose money under the plan and that the states could use the money as they saw fit.

Mayors were not so happy with the proposal, however. Of the spending to be transferred to the states, 80 percent is now used to help the poor. The mayors are afraid that the states will skim off part of that money. The cities would end up competing with the states for federal funds or, worse, begging state legislatures for funds they used to get directly from Washington. "This isn't federalism," Boston Mayor Raymond L. Flynn complained. "This is fraud."

The country is in a recession, but Bush's budget includes no anti-recession program. It assumes that the recession will be over in a few months without federal intervention.

The country is at war, but the budget includes no proposal for financing the war. It assumes that it will be over in a few months and that our allies will cover most of the cost.

The country is deeply in debt, but the budget does nothing to reduce the deficit. It assumes that outlays associated with the war, the recession and the savings and loan bailout will have only a temporary impact.

These are not new ideas. They are the old politics of the Reagan era: that the way to deal with tough choices is to make bold assumptions.

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