How to Trim the Deficit Without Raising Taxes

It is discouraging to listen to the latest round of Washington debate on taxes. Democrats, predictably, are joyous that President Bush seems to be taking the lead in moving both parties to support raising taxes as part of a deficit-reduction effort. Republicans, in turn, are sad to see the President back down from his popular stand against new taxes.

The reason I find the debate so painful is that the whole tax discussion could have been avoided--and still can be. There is no shortage of sensible ways to reduce the budget deficit by curtailing the growth of federal spending, especially by reducing outlays for consumption-oriented programs and other activities that make little or no contribution to a stronger economy.

Here are five items designed to whet the appetite of any embryonic budget cutter, liberal or conservative:

* Cancel the production of aircraft and missiles (and the construction of bases) that were justified to fight a communist invasion of Western Europe. That potential military threat simply has evaporated.

* Reduce the proposed new “home ports” designed for a 600-ship Navy. We are now down to 550 vessels and the number is “sinking” fast. Too much “cut insurance” remains in the Administration’s military budget.

* End subsidies to agribusiness. That is what large, wealthy farmers really are. There is no sensible reason for requiring taxpayers to support a segment of business dominated by people who are wealthier than they are. All the tears about the poor little farmer notwithstanding, the great bulk of the farm subsidies goes to the largest farms.

* Eliminate low-cost federal credit for the lucky business firms that qualify for these special subsidies. The present practice is unfair to all the working people (blue- and white-collar) who do not get these special benefits.

* Curb NASA’s penchant for circuses. The hard fact is that most of the scientific knowledge generated by the agency has come from undramatic and unmanned space exploration. In striking contrast, most of the money is going to--and most of the problems arise in--the more showy manned exploration projects. We do not need a costly expedition to Mars. We have already been there, in terms of serious scientific investigation.

Each of those cuts would save billions of dollars a year. In the new paperback edition of “Rendezvous With Destiny,” I point out numerous other possible cuts, large and small. Congressional action on just the top 12 would reduce the budget deficit by more than $100 billion a year (on a reasonably phased basis, of course).

The reason for bringing this subject up is not to rehash the past. Rather, it is because tougher action on the spending side of the budget will reduce the revenue increases (if any) necessary to achieve deficit-reduction targets. The villains here are a bipartisan group, consisting of both Democratic and Republican legislators, who seem to believe that they do not get paid to make hard choices but to please everyone. Some explanation is necessary.

A basic inconsistency bedevils government actions: The average voter demonstrates little regard for the activities of government in the abstract and for Congress as a whole. Every public opinion poll on the subject demonstrates that Americans show far less confidence in government, and in Congress specifically, than in many private institutions or individuals, such as small businesses, teachers, physicians and the clergy.

Simultaneously, however, the typical voter registers strong confidence in his or her congressional representative. In turn, that representative secures the position not by dealing forthrightly with urgent national issues but by responding with alacrity to the most parochial interests of special and powerful groups.

The result in terms of legislative action is extremely discouraging. When a major piece of legislation comes to the floor of the Senate or House, few senators or representatives show much interest in the overall policy issue. Instead, their main attention is given to adding an unrelated provision, a “rider,” to benefit a group of supporters.

The inclusion of many such riders is the price that proponents of the bill are willing to pay to get the support of the distinguished legislators whose votes are being traded for future considerations--log rolling, in the parlance of political science. As Will Rogers once said, “Politics ain’t nothing but reciprocity.”

The popularity of this attitude toward government policy arises from the disproportionate relationship in the political process between costs and benefits. Take the case of a special interest group making political contributions totaling $100,000 in a given year. If those payments help to achieve the successful attachment to a popular bill of a rider channeling a $1-million subsidy to its locality, industry or university, the return on that “investment” will be 10 to 1--far in excess of what can be expected from most private undertakings. Small wonder that contributions of political action committees are growing faster than company sales--or private income.

Of course, members of Congress can ease their consciences by rationalizing that they are doing something for their constituents by voting for these special benefits. The real cost to each legislator is merely having to support similar riders when they are introduced by colleagues. The high-minded proponents of the original legislation can take solace in the knowledge that the good that the new law as a whole will do far outshadows the cost of the many riders to which they have had to acquiesce. But, of course, it is the cumulative effect of thousands of those riders that generates the budget dilemma that faces the nation--and the pressure for raising taxes.

The prospects for changing the status quo in government are not very bright. How can we expect the executive branch officials who carry out government programs to be more concerned with minimizing the load on the taxpayer than the legislative branch officials who enact those programs in the first place? After all, how many members of Congress fail to be reelected because they are too liberal with the dispensation of government money?

The answer is clear and it is the reverse: The reelection rate for members of the House exceeds the retention rate for members of the Supreme Soviet (even before glasnost and perestroika ).

As Sen. Alan Simpson (R-Wyo.) put it so succinctly: “The problem for us is never saying ‘no’ to anybody.” It must be a lot of fun for members of Congress to “do good”--with other people’s money. Fun, yes. Good government, alas, no.