Face the Truth: Tame the Debt : Washington Seeks to Subdue Partisanship

Stanley Baldwin’s record as Britain’s prime minister in the pre-war 1930s bordered on disreputable. But these days much of official Washington can find no fault with his description of democratic government as a system that “until it is right up against it . . . will never face the truth.” It might even agree that these days the American system has no choice now but to face the truth.

What the system is right up against is a surge of as much as $100 billion in new debt--too much to be hidden with accounting tricks--that will wash over Washington next fiscal year. The truth that President Bush and Democratic leaders from Capitol Hill will face starting with today’s closed top-level budget meeting in the White House is that the federal government cannot tame the debt tide simply by cutting the budget. More income is needed, as well, and this means more taxes or user fees or revenue enhancers or whatever Washington chooses to call them.

Failure to find new income could mean gutting federal programs. Or it could mean driving up interest rates and tilting the nation’s economy into recession.

Up to this point, it is still possible to say the system works, even if it sits around stalling until the last minute. It is even still possible to think that what the White House really wants is to trap Democrats into seeming to beg for tax increases in an election year, although that gets less likely by the day. For one thing, it is true, as the Administration says, that interest rates are higher than the White House thought they would be when it submitted its current budget. It is also the case that tax receipts are down, for reasons that are not yet clear. A major villain is the still soaring cost of cleaning up the S&L; mess. So when John Sununu, White House chief of staff, said last week that the Democrats could propose any tax increases they wanted, but the President would reject them, eyebrows shot skyward all over Washington. It defied logic to suppose that Bush would set a trap for Democrats and then send Sununu out to warn them away from it.

So the system is trying to work; both political parties are at the negotiating table. With luck, they will go through several weeks of give and take to slow down the surge of debt: Too-brief negotiations would be a sure sign that one side had scared the other away.

But the system could also drive them from the table if the politicians lose sight of their duty in the negotiations. They are searching for 100 billion ways to hold off recession and prevent federal social programs from being gutted. But the danger remains that they will lose sight of the real job and start fighting to protect themselves from voters defiantly opposed to higher taxes or user fees of any kind. If that happened, Baldwin’s view of democracy might darken perceptibly to one that wonders whether the system can ever face the truth. Period.