When deficits turn to surplus Spending plans: Fixing Social Security and Medicare should come before Congress considers additional tax cuts.

October 08, 1997

BEFORE LAWMAKERS get too wound up spending every last dollar in surplus that rolls into the U.S treasury in the years ahead, they ought to think about the consequences.

In a miraculous reversal of form, Washington is buzzing not about a whopping budget deficit, but a projected surplus. Thanks to budget belt-tightening and a still-booming economy, the Congressional Budget Office now projects a surplus of $32 billion in 2002; private econo- mists say the continuing strength of the economy could means a surplus as early as next year.

When the books are fully closed on the fiscal year that ended Sept. 30, the deficit could be under $23 billion. That's more than $100 billion less than Washington forecasts a year ago. This turnaround has politicians so gleeful they aren't waiting for the surpluses to appear before planning how to spend the excess.

Some conservatives want a second round of big tax cuts. That would be the best way to ensure a quick return to massive deficits. These Republicans ought to heed the advice of House Speaker Newt Gingrich, who wants to turn some of the surplus into a "rainy day" fund to prepare for the next recession.

That's what most states do. Maryland, for instance, has $531 million tucked away either to help pay for an income-tax reduction that starts next year or to guard against economic bad times. That is a wise fiscal cushion.

U.S. House budget leader John R. Kasich has a good idea, too: Use the surplus to shore up the Social Security and Medicare funds that will run out of money in the next decade. The long-term stability of these retirement programs ought to be a congressional priority.

Other Republic spending notions run the gamut. Yet only one-time expenses ought to be considered to avoid driving up operating costs.

There are plenty of worthy targets: Environmental "superfund" cleanups; replacing more high-rise, low-income housing with TC garden apartments; giving police high-tech, crime-fighting equipment; boosting research at the National Institutes of Health; replacing dangerously aging highway bridges.

Caution is key. These surpluses won't last forever. New tax cuts ought to wait until we see what the economy looks in 2002. Now is the time for conservatives to remain true to their name. Any surplus should be treated with care so as to prolong the economic good times.

Pub Date: 10/08/97

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.