The Deficit: Bringing Federal Spending Under Control : Under Clinton’s leadership, red ink has been reduced and the economy has mounted a strong recovery. But health care inflation could scuttle the progress we’ve made.

The Times has invited the two leading candidates in the hotly contested race for Congress in the 24th District, which includes the southwest San Fernando Valley, to write on several issues before the election.

Incumbent Democrat Anthony Beilenson has been a congressman since 1977. Republican Rich Sybert was state director of planning and research from 1991 to 1993.

For this article they were asked if the federal budget deficit is a significant problem, and if so, what should be done to attack it.

Congress and the President have been struggling for some time now to reduce the huge budget deficits of the 1980s. We made a modest amount of progress during the last two years of George Bush’s presidency, but our greatest success came just last year when Congress passed President Clinton’s five-year, $500-billion deficit-reduction act, the largest such measure in history.

The 1993 Budget Act has resulted in several very significant accomplishments:

* Budget deficits have been slashed.

The Budget Act, which cut $225 billion in spending, will result in a drop in the federal deficit from its record high of $290 billion in 1992 to $167 billion next year--$136 billion lower than the deficit would have been if Congress had rejected the President’s plan. By next year, for the first time in over 40 years, the federal deficit will have declined for three years in a row.

Measured in terms of the size of our economy, the news is even better: The 1992 deficit equaled 5% of our nation’s gross domestic product. Next year’s deficit will be just 2.5% of GDP. And by 1998 it will have dropped to 2.2%.

* Federal spending is under tighter control.

Tough new budget rules require us to reduce discretionary spending (spending for virtually all government functions except payments for benefits and interest on the debt) by about $100 billion over the next five years. By 1998, the percentage of our nation’s GDP represented by all discretionary federal spending will drop from its 1992 level of 9% to 6.7%--its lowest level in 46 years.

Budget rules adopted in 1990 also prevent Congress from expanding government benefits or tax breaks unless compensating cuts or revenue increases occur. Only in cases where the President and Congress agree that a true national emergency exists, such as the Northridge earthquake, can Congress spend additional funds without making compensating cuts or raising revenues.

When the House of Representatives considered annual spending bills this year, we cut 395 programs below their previous year’s levels--and we eliminated 36 programs entirely.

* The number of federal workers is falling dramatically.

The number of federal civilian employees is being cut by more than 250,000 over the next six years. By 1998, we will have fewer than 2 million federal workers for the first time since 1966.

Thirty billion dollars of the savings which will be realized from eliminating these jobs will be used to finance the new crime-fighting initiatives before Congress so that no new taxes will be needed to cover those costs.

* Tax relief was provided for working families of modest incomes and made 90% of small businesses eligible for tax cuts.

The income tax increases in the deficit-reduction act will be paid only by the wealthiest 1.2% of Americans, who earn more than $180,000 a year--the people who benefited the most from tax cuts throughout the 1980s. The other 98.8% of Americans will either pay the same, or less, in income taxes.

* Economic growth is strong and steady--job creation is on the rise.

Interest rates dropped dramatically in early 1993 on the expectation that Congress would pass a major deficit-reduction bill. That drop fueled a national economic recovery which is now exceeding the predictions economists made only a year ago.

Since January, 1993, the economy has generated 4 million new private-sector jobs--double the number created in the previous four years. Jobs in manufacturing, which had been on the decline for several years, have been growing over the last six months.

Other signs of economic health--industrial production, retail sales, business investment, housing starts, consumer confidence--are all rising. Interest rates, while up slightly, are still at their lowest level in 20 years. And inflation is being held in check.

Because Southern California experienced a deeper recession than other parts of the country, recovery was bound to take more time here. But even in our region, the unemployment rate has been declining and other positive trends are finally emerging.

Although we are making significant progress on reducing the deficit, much more needs to be done. While spending for most federal programs is now declining, spending for entitlement programs, particularly Medicare and Medicaid, is continuing to surge. Unless the underlying causes of health care inflation are dealt with, federal deficits will begin to rise again starting in 1997. That’s one critically important reason for ensuring that any health care reform bill passed by Congress has effective provisions for controlling health care costs.

The President has appointed a high-profile commission to recommend proposals for reducing the costs of federal entitlement programs. The panel’s report, due in December, is expected to lead to congressional consideration of program changes that will further reduce federal spending.

As we proceed with efforts to make further cuts in the deficit, the most important ingredient we will need is support from the public. Americans need to make it clear that they want their elected officials to place a higher priority on balancing the budget than on cutting taxes or increasing spending. If the political will to solve this problem exists, the solutions will be achieved.