Whiff of Waterloo

No matter how smart they are, people can absorb just so much conflicting advice and contradictory data before they freeze, incapable of making any decisions at all. Some historians say that it happened to Napoleon at Waterloo. There is a whiff of Waterloo on Capitol Hill.

After spending at least part of a month’s vacation among the voters, what Congress seems to want most urgently is protection against foreign imports. What President Reagan wants, above all, is tax reform. In this corner is less money for defense, in that corner more. Do the members rescue debt-ridden farmers or let them go broke in the name of more efficient farming? Do they focus on Nicaragua or forget Nicaragua? Not to mention toxic waste, sanctions on South Africa, terrorism, immigration, airline safety and the 1986 elections.

What provides the whiff of Waterloo is that Congress has yet to focus on the one issue that belongs at the head of the list of conflicts and contradictions: the next federal budget.

Almost no matter what Congress does, the next budget will carry with it a deficit big enough to shove the national debt past $1.8 trillion and give it a running start toward $2 trillion--roughly twice the size of the debt that Reagan inherited.

The President’s seemingly endless string of 12-digit deficits helps hold interest rates aloft; high interest rates help make the dollar artificially expensive; a dollar worth 40 cents more than it should be makes it hard to sell American goods overseas, and almost impossible to keep out cheap imports.

Worse, the deficits lead to a day of reckoning not unlike the arrival of a huge credit-card bill in the mail. The early installments, in fact, already are coming due. For the first time in this century, the United States is a debtor nation--not quite on the scale, say, of Brazil, but in the same league. Los Angeles could build eight Metro Rail systems with the interest on the debt that the federal government pays in a single month. A payment is made every month in the form of the highest trade deficits in the nation’s history.

The kind of barriers to imports of which some members of Congress talk these days would not tilt the trade balance back to America’s favor. They could cause hard times in exporting countries, provoke a global wave of protectionism and raise consumer prices in this country, but they would not pull American industry out of the doldrums or make much of a dent in the unemployment rate.

Even a budget brought far closer to balance by prudent cuts in spending and increases in taxes would not give the United States a favorable trade balance, but, unlike trade barriers, it would help. Congress must heed the lesson of Waterloo, set aside all other conflicts and contradictions and tackle the deficit--the engagement on which all other battles will turn.