Not having it all

January 09, 2007

Americans often aren't good at making choices between options for spending their money. There's stuff they must have, stuff they need, and stuff they want. If money isn't there for all of the above, they just take out the credit card.

The federal government in recent years has reflected that impulse in spades, which explains both the $250 billion annual budget deficit and the $8.6 trillion national debt.

Newly in charge House Democrats took two steps last week toward reversing this trend. They adopted a policy requiring that new benefit programs and tax cuts be offset by budget adjustments elsewhere so there is no additional red ink, and they made more visible the process by which lawmakers often secretly win approval for special-interest spending and tax breaks without any review.

Both steps head in the right direction, but don't go nearly far enough.

The so-called paygo rule - for pay-as-you-go - doesn't apply to the discretionary spending in the federal budget over which Congress has most control, even though caps on that spending enacted in 1990, but later repealed, played a huge role in reducing the deficit and producing the surplus that emerged later in the decade. Nor does this discipline apply to current benefit programs, such as Medicare and Medicaid, that are growing far faster than the government's ability to pay for them.

Further, the paygo provision is only a House rule, not a law, so it can be easily waived for some popular purpose.

Imposing tough limits on new spending as well as new tax cuts would also give teeth to the effort to curb "earmarks"- the pork-barrel items lawmakers quietly tack on to larger budget bills. If there are limits on how much each category of spending can grow, that would force a drop in earmarks.

Earmark proposals are not all wasteful, but budgeting should be about choosing among alternatives. That requires a careful examination of all options as well as an acknowledgement of how much the government can afford.

Americans who don't make such choices face awful consequences. A similar disaster now threatens the whole nation, and the new steps alone won't prevent it.

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