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Here's one wall that should come tumbling down


Something there is that doesn't love a wall.

-- Robert Frost

JUST A year ago, Democrats and Republicans came back from the budget summit at Andrews Air Force Base with a deal to reduce the budget deficit by cutting spending and raising taxes. However, the Democrats made one serious mistake when they reluctantly agreed to a three-year "wall" between military and domestic spending, treating them as two separate budgets.

This wall provides that any further cuts in defense spending may not be reprogrammed for other needs; if military spending falls below the budget ceiling, the savings must go to reduce the deficit. In other words: no peace dividend until 1994.

Of course, the world has changed mightily since last September. For one thing, we are no longer debating whether Soviet communism is really dead. And we now know that the recession, which was just beginning to bite a year ago, is likely to leave in its wake a slow recovery and persistent unemployment.

On both counts, the budget wall of 1990 makes no sense in 1991. The budget wall not only makes it impossible to reprogram military outlays for other uses; it also diminishes the Democrats' political appetite for pressing steeper defense cuts because the cuts can't produce any tangible gains.

Why not just tear down the fiscal wall -- as a domestic counterpart to the Berlin Wall whose demolition signaled the end of the Cold War?

Sentiment is rising among the Democratic rank and file in Congress to do just that. Rep. Barney Frank has called on his colleagues to mount "Operation Jericho," to make the wall come tumbling down. Early this month, Frank's floor amendment to reduce military spending by some $11 billion lost, but it garnered an impressive 145 votes, including a majority of House Democrats.

The wall has also stymied attempts to extend unemployment benefits for the duration of the recession. Despite congressional action in August, President Bush has refused to declare that a state of emergency exists, which is necessary to override the budget deal and allow additional unemployment benefits to flow.

So last Tuesday, the House passed a second version of the unemployment insurance bill, declaring an emergency in the legislation. President Bush will veto this version, too, as busting the budget, unless Congress tells him how they will pay for it. The best way to raise the requisite $6.3 billion is by cutting that amount from defense spending -- but this alternative runs into the same budget wall.

In pressing the unemployment extension, House Speaker Tom Foley insisted that his party was "not looking for a political fight." But that is precisely what the Democrats should be looking for.

Politics is about competing visions of the good society. Democrats should be defining just where they differ from Republicans -- on the peace dividend, on unemployment insurance and on other key pocketbook issues. Otherwise, politics is one undifferentiated mush. No wonder voters tune out.

The main reason the wall endures is that several Democratic leaders -- notably Speaker Foley and Dan Rostenkowski, chairman of the House Ways and Means Committee -- were architects of last year's budget deal and feel bound to support it. But other key members of the leadership, such as Senate Majority Leader George Mitchell, now favor taking a tougher line.

One possible compromise being discussed among Democrats is let the wall remain for just this fiscal year, and tear it down when the next budget begins to be formulated in January 1992. That would give Democrats a potent issue for the presidential election year. In the meantime, the Democratic rank and file should keep chipping away wherever they can, forcing on-the-record votes on breaches in the wall.

American taxpayers still spend over $140 billion a year -- nearly jTC half the military budget -- defending Western Europe, but from what? Tens of billions of defense dollars shifted to civilian infrastructure spending, or to commercial rather than military research, could help fuel economic recovery without resorting to higher taxes.

Internationally, the United States can increase its reconstruction aid to the former Soviet bloc and the Middle East only by reducing military outlay. Our national security today depends on political stability and economic growth in these regions, as surely as it depended on keeping communism at bay during the Cold War.

This is a moment for knocking down walls. Demolishing the budget wall is sound economics and smart politics -- the sooner the better.


Robert Kuttner writes regularly on economic issues.

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