The Budget Is Not Such A Big Deal

BEN WATTENBERG

August 12, 1993|By BEN WATTENBERG

WASHINGTON — Washington.--There is something sad to say about the budget bill, but let's talk first about stupid and silly.

There are conservatives who announce with certitude that the deal will drive the economy into a brick wall. There are liberals who trumpet with surety that the same deal will restore economic vigor.

This is economic illiteracy. The budget plan runs for five years. The current gross domestic product amounts to about $6 trillion per year. Over five years it will amount to an aggregate estimated $36 trillion -- very big bucks.

By contrast, the deficit reduction allegedly amounts to $496 billion, or 1.4 percent of the $36 trillion. Big leverage it ain't. Surety and certainty it ain't.

It's a little tail on a big mother dinosaur, which is currently galumphing through the forest on its own, as is its habit.

There has been a serious contest about whether Republicans or Democrats win the booby prize for overstated political rhetoric in this matter. And the winner is . . . the Republicans!

After all, the likeliest scenario is that the $6 trillion economic dinosaur, barely impacted by the Washington bipartisan liars club, will continue to crunch forward, just as it has been doing.

What then will Republicans, who have predicted recession, say on the hustings in 1994? Perhaps: ''We were wrong! Vote Democratic!'' Depend on it.

Still, the GOP can clean up in 1994. They will claim it's the biggest tax increase in history (false, if measured in uninflated dollars and/or related to the GDP).

Of course, Democrats will claim it is the biggest deficit reduction in history (false, for the same reason). But the taxes (even though mostly hitting the well-to-do) roll through the entire economy, while the deficit reduction is slim, and invisible for a long time.

There has been other silliness. I loved the part about ''reversing Reaganism.'' Oh, really. The zero tax rate for poor people was of Reagan vintage, and remains unreversed.

And I did not expect a prominent rationale for a ''Yes'' vote to be ''saving Clinton's presidency.'' Say what? Wasn't the idea to save America's economy?

Beyond silly and stupid, there is sadness.

Clinton ran on ''change.'' Granted, that means different things to different people. But the best of Clinton's language captured most of us.

It will be a long time until we hear again words as radical and right as the trumpet calls to ''end welfare as we know it'' and to stop ''something for nothing.''

This deal hardly touches that. It is partly because the entire political establishment chickened out on ''entitlements,'' those ravenous programs that grow without specific congressional appropriations, driving deficits skyward. Deficit hawks believe that a real change in attitude is in the air and that gutsy political leadership could have put a lid on things.

But the biggest problem can be refined down further than that. Deficit hawks don't often differentiate between entitlements.

Yet, the trouble with some entitlements are only that they cost more than we want to pay. Social Security and Medicare generally help Americans. Moreover, they are officially ''earned,'' not "something for nothing.'' ''Supplemental Security Income'' (essentially welfare for the needy aged), may be ''unearned,'' but it, too, helps the recipients.

It's a problem. It causes the deficit. But there is an aspect that's worse: entitlement programs that end up counter-productive.

These include parts of Aid to Families with Dependent Children, food-stamps, Medicaid and rent subsidies, to begin a lengthy list.

Long-term, these programs hurt the very people they are designed to help. We have created a growing dependency class. It is destroying families, blighting communities and souring the country.

This budget does not cut such counter-productive entitlement spending, but rather increases it. And the liberals are bragging about that.

The Clintonites respond: Just you wait and see, more spending and entitlement cuts are on the way, wait for welfare reform, that will do it.

OK. We don't have much choice. We will see; we will wait. But for the moment our Democratic legislators have enacted more counter-productive something for nothing.

Ben Wattenberg is a senior fellow at the American Enterprise Institute.

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