A reasonable argument for a budget amendment

February 16, 1994|By ROGER SIMON

WASHINGTON -- Some heavy hitters from the Clinton administration climbed Capitol Hill yesterday to tell Congress how Sen. Paul Simon's balanced budget amendment was going to ruin America.

"The balanced budget amendment, by forcing cutbacks in the very programs at the center of our anti-crime crusade, could severely undermine [our] ability to banish violence from our homes and our streets and our schools," Attorney General Janet Reno said.

The amendment "would degrade the Constitution and the political process and shake the public trust in government," Leon E. Panetta said.

The balanced budget amendment will result in "cuts that will push 1 [million] to 1 1/2 million older Americans into poverty," Secretary of Health and Human Services Donna Shalala said. "I can't imagine anyone voting for these cuts."

In reality, however, the White House can all too well imagine lawmakers voting for these cuts.

Simon, a Democrat from Illinois, has 55 co-sponsors for his amendment and is thought to be only a handful short of the 67 he needs for passage. If the Senate approves it, the House is expected to approve it also. And then 38 states would have to ratify it.

Which might appear unlikely. But the basic concept behind the amendment has a certain reasonable, and politically attractive, sound to it: In order to spend a dollar, the government would have to take in a dollar.

There were dueling hearings on the amendment yesterday, with Simon holding hearings in favor of it and Sen. Robert C. Byrd, D-W.Va., holding hearings against it. Simon finished first, and I found him in his office dictating letters.

He was wearing a white button-down shirt and trademark bow tie, and he asked an aide to bring in his big cardboard charts so he could explain high finance to me.

I started with the obvious question: Since Congress already has the ability to balance the budget, why do we need a constitutional amendment?

"A few years ago, I drafted a long-term health care bill that would have required a one-half percent increase in the Social Security tax," Simon said. "Two of my colleagues said they really liked the bill and would co-sponsor it if I would just drop the tax to pay for it.

"We do not like to do unpopular things here. Faced with doing the unpopular thing or ducking, politicians will duck. There's an old saying that there were so many heroes at the Alamo because there was no back door. We need no back door."

But what about all the scare talk from the White House? How can we tolerate cuts that will release killers and starve the elderly?

"Paying for programs instead of borrowing for programs is not painless," Simon said. "But the cuts they [the Clinton Cabinet] were talking about today will be mild compared to the cuts we will have to make down the road if we don't pass this amendment."

Simon believes that if we keep borrowing our way out of trouble, government will reach a point where it cannot pay the interest on the debt and still function.

"What government will do then is 'monetize' the debt," Simon said. "We will print more dollars."

And that could lead to explosive inflation, with people carrying their money around in wheelbarrows to buy the necessities of life.

"It does not do any good to get a $1,000 Social Security check," Simon said, "if bread is going to cost $100 a loaf."

The interest the government pays on the debt is similar to the interest you pay on your credit card bill: It doesn't buy any goods or services.

"It's chewing us up, and we get nothing for it," Simon said. "This year, the gross interest payment -- $800 million a day for interest -- will be twice as much as we spend on all our poverty programs, eight times as much as we spend on education.

"Getting rid of debt, like getting rid of a drug addiction, won't be easy, but it won't be as bad as they are saying."

Opponents of a balanced budget amendment offer a dual argument: Not only will the amendment be the ruination of America, but it is also a mere gimmick.

"It is hard to see how it can be both," Simon said with a small smile, "but you know what Olympia Snowe, the congresswoman from Maine, said?

"She said that if it were just a gimmick, Congress would have passed it long ago."

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