Deficits, Debts and Deceptions

June 21, 1993

Yogi Berra's dictum that "it ain't over till it's over" applies in full measure to the so-called deficit reduction bill making its tortuous way through the legislative maze on Capitol Hill.

House passage of the bill by just six votes, dramatic as it was, and the Senate's expected approval this week of a much-altered measure are only preliminaries to the main event -- a House-Senate conference committee in which the legislation will be substantially rewritten. Even then, this huge "reconciliation bill" could be changed during later enactment of appropriation bills. It is hard to conceive of a system better designed to hoodwink the public. Or provide employment for lobbyists.

President Clinton insists he will approve an economic plan only if it "reduces the deficit" (translation: holds down the projected growth of the national debt) by $500 billion over the next five years. Future generations won't be impressed. At the end of the period, an extra $1 trillion-plus will be added to the $4 trillion they already owe.

As this process grinds on, it becomes more and more evident that it may turn out to be as fraudulent as earlier pretenses at moving toward a balanced budget. The best part of the president's original package -- his call for a $72 billion tax on the heat content, or BTUs, of practically all forms of energy -- has been rebuffed by the Senate Finance Committee in favor of a 4.3 cents a gallon tax on transportation fuels that will raise only $24 billion. The worst part of his program -- his failure to cap runaway health, pension and veterans benefits -- has unfortunately survived despite the brave fluttering of the deficit hawks.

In this struggle, there are no heroes. Conservatives continue to pretend real progress can be made without restoring the revenue base undermined by the mindless tax cuts of the Reagan years. Liberals continue to insist on huge government expenditures without a thought to their future effect. And the president, now in a "centrist" mode, talks only about deficit reduction and not about his new spending plans -- as though nobody will notice.

The Washington establishment needs to get serious. While it should not impose so severe a dose of austerity that the economy is plunged into deep recession, it can select elements from the administration, House and Senate versions of the economic package to produce some real deficit restraint.

In our view, the BTU tax should be restored to something close to the original Clinton proposal. It is fairer and more environmentally helpful than the Senate's gasoline tax. At the same time, Senate efforts to keep new loopholes from creeping into the tax code should prevail. The end result probably will be a deal between Democratic liberals and conservatives, for the president's party dares not come up with nothing. Republicans will be consigned a spoiler role, and relish every minute.

This is not a happy moment in the legislative process. But maybe something worthwhile will come out of it. It's not too late. It still ain't over.

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