Parties Faulted on Plans to Cut Federal Deficit : Congress: Hollings, Rudman say proposals fail to address problem. They see tax hikes, Social Security curbs as vital to balancing budget by 2002.

Despite Congress’ much heralded effort to balance the federal budget by the year 2002, two longstanding advocates of deficit reduction said Tuesday that both political parties have failed to deal honestly with the budget by refusing to consider the tax increases and Social Security restraints needed to solve the long-term deficit problem.

Sen. Ernest F. Hollings (D-S.C.) and Warren B. Rudman, a former Republican senator from New Hampshire, in an interview with Los Angeles Times reporters and editors, raised questions about whether the budgets moving through Congress would achieve their advertised goal of eliminating the deficit.

Rudman, who teamed up with Hollings and Sen. Phil Gramm (R-Tex.) in the mid 1980s to author a major anti-deficit law, said that congressional Republicans brought a “major sea change” by at least trying to balance the budget. But he said the achievement would be short-lived if Congress does not impose additional restraints on Medicare and Social Security.

“Let’s assume everything [in the budget] will work as they say it will. It only gets you close to balance . . . in the year 2002,” Rudman said. “The current growth of entitlements, unless we do something about them and remanage them, starts back up again.”

Hollings said that Congress is obscuring the true magnitude of the budget problem by continuing to count Social Security surpluses against the deficit. He criticized the news media for perpetuating that impression in their reporting on the budget.

“We are not paying for the government we are getting,” Hollings declared, adding that it would be impossible to truly balance the budget without raising taxes.

“If you can do it without it, I’ll jump off the [Capitol] dome,” Hollings said.

A spokesman for the House Budget Committee acknowledged that Congress would have to take further steps to restrain the growth of Social Security and other government entitlements to keep the budget in balance. But if Congress tried to do that on top of all it is seeking in the current budget, he said, “the whole thing would crumble. You’d get nothing done.”

Both Hollings and Rudman advocated revamping the tax code. Hollings called for a value-added tax, while Rudman endorsed a tax on what people spend, not on what they save. But Rudman acknowledged that there is “absolutely no political support whatsoever” for either approach at this time.

In assessing the GOP budgets in Congress, Rudman said he was particularly disappointed that they did not call for any “means testing” of Social Security and other entitlements, to gear benefits and costs to beneficiaries’ incomes. He also said that he is “totally opposed” to GOP tax-cut proposals, despite the fact that he is supporting the presidential candidacy of Senate Majority Leader Bob Dole (R-Kan.), who has called for a tax cut as a prominent part of his campaign.

“I disagree with Bob Dole on a number of issues, but that does not detract from my belief that overall I support him,” Rudman said.

In other comments on the presidential race, Rudman said he doubted that Colin L. Powell, former chairman of the Joint Chiefs of Staff, was going to mount an independent bid for the presidency, but he said that he had urged Powell to consider running with Dole as his vice-presidential candidate.