A Budgetary Fuzzy Fix

The president and Congress, using fuzzy accounting and smoke and mirrors, finally fixed their fiscal Y2K problem. Predictably, the result after a final vote Friday--the $1.7-trillion budget for fiscal 2000--is not pretty, but it isn’t all bad news either.

True to Washington’s unwritten principle that the nation’s spending “needs” will always rise to the level of revenues and then some, the budget will spend every penny of the anticipated non-Social Security surplus. In addition, and contrary to what congressional leaders have been trumpeting for months, it will also dip into Social Security to the tune of $20 billion or more of the estimated $147-billion surplus.

To keep its promise to stay out of the Social Security surplus but spend the money anyway, Congress resorted to the old gimmick of switching billions of dollars of spending into an “emergency” category that doesn’t count against the regular spending limit and to “directed score keeping,” a dishonest form of accounting used to make spending and revenue projections come out even. The lawmakers also postponed the last payday of the fiscal year for some government employees to shove some $3 billion into next year’s spending.

After a few years of leaner spending in the early and mid-1990s, Washington is back on a bipartisan spending spree. The discretionary budget for fiscal 2000 is up more than $40 billion from last year, representing a 6.5% year-to-year increase, more than double the rate of inflation. It also exceeds by more than $30 billion the spending cap that Congress set for itself in 1997.

Congress is all but certain to exceed next year’s limits as well. It would be far more honest for both parties to acknowledge that the earlier limits were unrealistic, increase them and then try to meet the new caps.

As usual, the budget is laden with pork- barrel spending, exceeding $14 billion. Southern California is getting its share, including funds for a new archway at Los Angeles’ Chinatown.

Though the budgeting process was full of artifice, there was a significant change in attitude toward the Social Security trust fund, and Republicans get most of the credit for it. For more than three decades, Washington treated Social Security as a source of general revenues, drawing from it at will to pay for things like defense or education. Congressional Republicans, although dipping slightly into the trust fund now, have kept Social Security off budget, returning it to its original function of paying for retirement. The current Social Security surpluses would be used to pay down the historical deficit of the trust fund.

To be sure, Social Security still needs fixing for the long haul. But today’s consensus against spending its surpluses helps reduce the government’s debt and acts as a significant constraint on government spending. That is worth preserving.