Deficit Control Made Difficult : It’s hard to do when neither side wants to get real

It’s budget time. President Clinton formally introduced his $1.6-trillion budget to Congress on Monday. But even before the budget was out in print, details of how he would spend and cut to generate savings of $144 billion over five years were well known. The Administration’s strategy is to contain the deficit at about $200 billion a year; that would merely hold the red ink at about current levels. In his first two budgets, Clinton had succeeded in slashing the deficit from its 1992 record level of $290 billion.

A difficult balancing act will be required to avoid sacrificing deficit reduction as the President takes a calculated step to put the onus of budget cuts on Capitol Hill and the Republicans. After all, the Republicans are the ones pushing the balanced-budget amendment and tax reductions while refusing to actually specify what cuts they would make.

Clinton’s budget, with its emphasis on education (Head Start and post-secondary), training, middle-class tax cuts and consolidating programs, is designed to smoke out the GOP on what it would cut. Congress’ majority party has twice postponed presenting an alternative budget with spending reductions to offset the $203 billion in tax cuts proposed in its “contract with America.”

Neither Clinton nor the Republicans have been willing to address the really tough problem of the rising costs of Social Security, Medicare and Medicaid. Without reining in these expanding entitlements, containing the deficit in the long run or balancing the budget is virtually impossible. Republicans and Democrats adroitly avoid these issues.

For now the President is selling his budget on the basis that the deficit as a percentage of gross national product is declining--that is, revenues are growing faster than the deficit, the reverse of what was happening when Clinton took office. His projections may be overly optimistic; the Congressional Budget Office estimates the deficit will skyrocket past $400 billion by 2005.

The tough choices of getting the federal budget under control are becoming ever more apparent. Some valid unbudgeted expenditures, such as earthquake disaster relief, are inevitable. But real deficit control requires steady, across-the-board cuts, including reductions in entitlement programs.