Ex-Sen. Rudman, in Baltimore, warns of threat posed by U.S. budget deficit

January 12, 1994|By John E. Woodruff | John E. Woodruff,Staff Writer

Former U.S. Sen. Warren B. Rudman warned yesterday of "deep long-range concerns" about what the federal budget deficit will do to the U.S. economy, even as Maryland business leaders took in a series of upbeat forecasts for the nation and Maryland for 1994.

"We're getting help right now from historically low oil prices, and we are coming out of a recession, so the cyclical picture looks good for 1994," Mr. Rudman said. "But what do you have if you get good news in 1994 and maybe 1995, and then by 1996 or maybe even late 1995, you're already in trouble again?"

Arguing that a mushrooming budget deficit is still the chief threat to the U.S. economy, the co-author of the Gramm-Rudman-Hollins deficit-control plan brought his balanced-budget gospel to Baltimore as keynote speaker at the Maryland Chamber of Commerce's annual economic outlook meeting. Mr. Rudman is co-chairman of the Concord Coalition, a group that advocates deficit reduction.

Mr. Rudman, a former Republican senator from New Hampshire, sounded his warnings against a background of forecasts calling for modest economic growth in Maryland in 1994, in the annual "consensus forecast" of state academic economists. The forecast was compiled by the state Department of Economic and Employment Development, a co-sponsor of the meeting, along with the chamber and the Baltimore Business Journal.

The consensus made public at yesterday's meeting, an average of forecasts by four academics who track the state's economy, calls for 1.3 percent growth in jobs this year.

Maryland has long lagged behind the national recovery, which began in the second quarter of 1991. Economists believe that 1993 may prove to have been the state's first year of net growth since the recession set in in 1990. Yesterday was the first time that economists at local universities have unanimously seen Maryland heading into a year of growth.

Mostly, Mr. Rudman hammered away at pet themes, such as pointing out that about 50 percent of federal government expenditures are for "entitlements" like Social Security and welfare, and that an additional 17 percent goes to pay interest on a mushrooming federal debt, so that less than one-third of the budget is available for government operations.

But he took time out for a nod to President Clinton, a Democrat who, Mr. Rudman said, has taken on "questions that recent Republican presidents didn't tend to," including the budget deficit, health care and "giving consumers the sense that something is being done about the economy."

"In 1994, health care will be both the greatest opportunity and the greatest jeopardy facing the United States economy," Mr. Rudman said.

"There is an opportunity here to get control of what this immense segment of the economy costs, but everything will depend on whether the country faces the hard decisions to estimate the expenses honestly and pay up to meet them, or we end up just creating new entitlements without the courage to confront what they cost," he said.

"For now, all we can say is that health care needs fixing, and that what we're going to end up doing about it is still the great unknown of the economy."

Baltimore Sun Articles
|
|
|
Please note the green-lined linked article text has been applied commercially without any involvement from our newsroom editors, reporters or any other editorial staff.