It's entitlements, stupid Future at stake: Budget battle should refocus on out-of-control spending programs.

January 29, 1996

IS WASHINGTON going to dodge the bullet again? Are Republicans as well as Democrats going to miss another opportunity to put even marginal clamps on entitlement programs that threaten huge generational and financial crises early in the next century? Could it be that the issues now being thrashed out are a mere sham -- a cover -- for passing the buck to future presidents and Congresses?

The danger is real enough. Both parties are backing away from their professed determination to balance the budget in seven years. House Speaker Newt Gingrich seems willing to settle for a mere "down payment" in spending cuts of less than $100 billion -- hardly enough to make a blip on long-term projections. Democrats scramble for a Pyrrhic victory to protect Medicare. Neither approach will do anything for the retirement security of Baby Boomers and the tax burdens placed on their children and grandchildren.

While politicians trade partisan shots in their budget battles, the focus on the gigantic entitlement problem is fading fast. It would be deplorable to lose this opportunity. The Gingrich revolution would forfeit any right to claim meaningful change. Democrats could forget about changing their big-spender image.

It is important to keep in mind that even the most ambitious plan advanced by House Republicans would provide a fiscal fix only to the year 2002. After that, because of inexorable demographic trends, budget deficits will explode to provide pensions and health care for an aging population. The share of gross domestic product devoted to entitlements -- Social Security, Medicare, Medicaid, etc. -- will double from 10.9 percent in 1996 to 20 percent by 2030. Unless restrained, such demands would consume every cent of foreseeable revenues -- a clearly unacceptable result.

On Capitol Hill today there are too many Republicans ready to junk entitlement curbs in favor of tax cuts, too many Democrats resistant to serious curbs on spending. If these two groups prevail, the long fight to balance the budget would be reduced to cruel charade.

In the very few weeks left to negotiate, true deficit hawks in Congress must go on the offensive. The target should be a $320 billion cutback in entitlement spending as advocated by conservative to moderate Democrats known as "blue dogs." If they can combine with balanced-budget Republicans willing to whittle down outrageous tax-cut demands, the first small step toward fiscal sanity will have been made.

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