From Lip Service to Debt Service

President Bush, acting presidential, looking the fearsome federal deficit squarely in the eye and bowing to political imperatives, says he now accepts the need for “tax revenue increases.”

And, for the moment at least, Democratic leaders are showing their class by not gloating over this about-face.

It is a measure of the gravity of the fiscal crisis that both sides are on their best behavior.

No politician likes to vote for tax increases, and of course no voter welcomes them. The Democrats have said they won’t take the heat for proposing unavoidable tax hikes. Bush has now made action on higher taxes and on cuts in spending a matter of bipartisan responsibility. That’s as it should be.

The brutal reality facing the negotiators is that next year’s budget looks to be at least $160 billion in the red.

Add to that the estimated one-year cost of cleaning up the S&L; mess and the deficit will almost certainly soar past $200 billion.

Things could get worse. If the economy weakens, federal revenues will fall. If interest rates rise, Washington could be forced to spend even more than the staggering $152 billion now used to service the federal debt.

The Gramm-Rudman law says the deficit for the new fiscal year that starts Oct. 1 must be brought down to $64 billion or less to avoid triggering across-the-board budget cuts. That law may be changed in the course of the current negotiations, but even a higher permissible deficit will still force major spending cuts and significant increases in revenue.

It won’t be painless. A lot of people, a lot of congressional districts, a lot of special interests are going to be hurt.

The negotiators have been at it for seven weeks and achieved virtually nothing. Now, maybe, the President has broken the impasse. But time is running out. Congress has only about 40 working days left before its scheduled recess, and there are scores of billions in spending cuts and tax hikes to be debated.

With his turnabout, Bush may have removed a lot of the partisanship from the argument.