Deficit Doves Flying High

July 19, 1993

Paul Tsongas has it just about right when he says the Clinton administration's "Democrats only" approach on taxes and spending has pushed the Republicans into a "negativism" that undercuts the nation's hopes for an effective assault on chronic federal deficits. As House and Senate conferees get down to the business of producing an economic plan before their early-August recess, the signs of a disconnect from budget realities are all around.

GOP legislators, who have effectively opted out by unanimously opposing anything any Democrat has concocted, are now seizing on the flimsiest of evidence to claim the deficit problem is not as bad as the White House projects. Their tactic, of course, is to woo as many Democratic defectors into their no-new-taxes camp as they can. In that way, they hope to pull a political hat trick by encouraging a Democrats-only gridlock or, failing that, a deficit curtailment plan much reduced from President Clinton's five-year $500 billion target. Either result would be worse for the country than Mr. Clinton's halfway deficit-fighting measures.

The current furor over marginal reductions in deficit projections for fiscal years 1993-1998 is a case in point. Last April, the administration figured the deficit for the present year at $322 billion. That has since been cut to $285 billion because Congress rightly spurned the Clinton jobs-stimulus bill, Treasury receipts were higher than expected and savings-and-loan bailout costs somewhat lower than anticipated. These savings, though average only $8 billion annual from 1994 to 1998.

Yet Republicans seized on these adjustments -- just peanuts in the context of a $1.2 trillion federal budget -- to push their campaign against any new taxes. In league with oil-patch Democrats, they have already killed the administration's House-passed plan for a broad-based BTU energy tax that would raise $72 billion over five years. Democratic leaders may have to settle for a Senate-passed boost of 4.3 cents a gallon in taxes on gasoline that will raise $50 billion less. To make up the difference -- if they do make up the difference -- would probably require a tax on utility bills and spending cuts produced by budgetary legerdemain.

But the Democratic leadership is being pushed toward less deficit reduction by demands from the House Black Caucus for empowerment zones and food stamp spending and from the business community for stimulatory tax breaks knocked out in the Senate. Meanwhile, the president has trotted off the field, tossing the ball to Democratic legislators while Republicans shout catcalls.

Common wisdom says this situation has put the Democrats in a position where they have to prove they can govern, given their control of the White House and Congress. But if this is the only way to break deadlock, the concept of bipartisan cooperation for the good of the country goes by the boards.

Heroes? There are none in today's Washington.

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