. . . and Tight Fists

Did President Reagan just come back from Venice, or from the Emerald City of Oz? Clearly the President has been off in a fantasyland where some wicked witch is responsible for the evils of spending and deficits. Now he will make deficits go away through the magic tonic of budget reform and constitutional amendment.

The President topped the economic illogic of Monday night’s broadcast to Americans with this amazing statement on Tuesday: “The only thing worse than deficits is high taxes. Using taxes to cure deficits is like using leeches to cure anemia.” That is like saying that it is bad to throw one gallon of gasoline on a fire, but it is all right to pour two gallons of gasoline on it.

Well, sorry to burst the President’s bubble, but welcome him back to Kansas--and New York and California and the rest of the 50 American states. This is the good ‘ol U.S. of A., where the federal debt stood at $1 trillion when Reagan took office and is pushing $2.3 trillion today.

Reagan claimed again Monday night, in a tattered page out of his 1980 campaign, that it is Congress’ wasteful domestic spending that is causing those dreaded deficits. But this is 1987, and the President’s own budget figures disclose that defense spending has increased 48% in the past seven years compared with 16% for non-defense spending--including many areas like Social Security that could not be cut.

The President still insists that his programs have spread bounty all across the land, claiming that real family income continues to grow. But median family income and average hourly earnings have been lower during most years of the Reagan presidency than before he took office. Meanwhile, corporate profits have nearly doubled.

If the Democrats in Congress have their way, Reagan added, the defense budget is headed back to the woeful 1970s. Hardly. The House Armed Services Committee, while proposing less than the President, has supported the spending of $3.8 billion for the Strategic Defense Initiative, $1.3 billion for MX missiles, $2.2 billion for the Midgetman missile, $550 million for the flawed B-1B bomber, $10.8 billion for new ships and nearly $8 billion for nuclear weapons. But even those levels are excessive.

Reagan likes to talk about the family budget. But if the average American family budgeted the way the White House has, it would now be spending relatively less for shelter, food, clothing, education, utilities and entertainment, but it would have five new autos and double its debt. At least the autos would work. At the Paris Air Show on Monday, the Air Force could not fly its prized B-1B because the engines would not start.

The President is angry because Congress is trying to get him to do what he should have done all along: Pay for at least a portion of the defense programs that he wants. Up to now, the country has gorged itself on duplicative and defective military systems and the luxury of tax cuts that gave the greatest bounty to the affluent. The result is more new debt than was compiled in the previous 192 years of the American Republic.

The wizard’s smoke, mirrors and noisemaking no longer can obfuscate the real reasons for the deficit crisis, or wish it away. What will ease it is the combination of a modest tax increase, some judicious economies and efficiencies in defense and prudent trimming in selected domestic programs. That requires making judgments, setting national priorities and working out differences with Congress through the traditional governmental process.

That process somehow worked for past Presidents. It is time, finally, that President Reagan give it a try.