Of Blue Dogs and centrists Genuine budget-balancers: Clinton White House and GOP supply-siders are the problem.

March 18, 1997

A BUDGET DEAL between Republicans and Blue Dog Democrats? The very thought should send deficit hawks a-fluttering. Balanced income and outgo could be achieved by 2002, not through the usual gimmickry indulged in both political parties but through old-fashioned conservative bookkeeping.

That would mean no tax cuts, or only minimal tax cuts, until Congress and the White House first reduce spending -- thus reversing the sequence that got the country into deep debt in the first place. It would mean accurate government inflation figures to stop a budget hemorrhage brought on by over-compensating Social Security beneficiaries and curtailing revenues through a hidden tax break. And it would mean genuine bipartisanship among centrists in Congress fed up with political polarization.

Of course, it might not happen. The whole idea could go up in smoke just like the post-inaugural happy talk about budget compromise.

The booby prize goes to President Clinton. It was he who rejected the idea of a commission to reassess the consumer price index, or CPI, even though most economists agree it over-estimates inflation and costs the government hundreds of billions. To be sure, it was good politics. The president could preen as the defender of old folks, having deftly waited for Senate Republican leader Trent Lott to go first in backing a study commission. But it didn't do a thing for balancing the budget.

Another impediment to agreement comes from GOP supply-siders who still chase after the chimera of more revenues from lower taxes. Their insistence on out-sized tax cuts is as regrettable as Mr. Clinton's cop-out on CPI.

Fortunately, there are signs of movement on the Republican side. Having started the year demanding tax cuts of $200 billion a year (an idea dependent on a CPI windfall), some GOP leaders are now talking in the $70 billion to $80 billion range. They are also considering avoidance of the kind of huge reconciliation bill that led to government shutdown and a setback for the GOP that set Mr. Clinton up for re-election.

This strategy depends not on cooperation from the White House, which is not forthcoming, but on a linkup between most of the GOP majority and a small but crucial number of "Blue Dog" and "Coalition" Democrats who have come up with the only credible balanced budget proposal in Washington. If these two groups can execute an end-run around the White House on the left and the supply-siders on the right, post-inaugural hopes for a sound balanced budget deal could revive.

Pub Date: 3/18/97

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