Washington -- Record high deficits are the single most important problem facing economic policy makers today. In this election-recession year politicians unable to resist the siren song of tax cuts and pump-priming spending increases may make the deficit problem worse. In that context, the president's budget is a surprisingly responsible document.
The budget does contain some creative accounting and blue smoke and mirrors. That is bad budget practice and bad politics. It is bad budget practice because everyone who wants deeper tax cuts or higher spending will adopt and expand the gimmicks in the budget to create the illusion such proposals won't increase the deficit. It is bad politics, because it gives opponents something legitimately to criticize. They don't have to talk about the hard choices the president was willing to make.
This budget does, however, make hard choices. It contains entitlement cuts and other changes in mandatory spending sufficient to offset the cost of the tax-cut proposals over the next five years. It would cut defense $50 billion, freeze domestic discretionary budget authority and use the savings to reduce the deficit. You may disagree with the priorities in the president's budget. You may not like the specific choices he has made. You may not think this is the way to stimulate the economy and promote economic growth. But no other budget anybody else is likely to propose this year will reduce the deficit nearly as much.
Polls show that Americans doubt the president's budget will improve their individual circumstances very much in the short run. They are right. Lower interest rates, higher unemployment-compensation outlays and the change in withholding-tax tables will help. But nothing else government does will have much impact on our pocket books over the next few months. Criticism of these measures as paltry only serves to underline the limits to what government can do through fiscal policy to jump-start the economy.
Critics would cut defense deeper than President Bush proposes to do, give the middle class a bigger tax cut and and/or raise taxes on the rich. But you can't cut defense deep enough, you can't raise taxes on the rich high enough, to pay for a really big tax cut for the middle class. So the president's critics either must resort to budget gimmickry of their own or argue for suspension of the budget discipline enacted as part of the 1990 budget agreement.
We all tend to look at federal policy through our own special prism. No president ever will propose to increase education spending enough to satisfy most teachers. The same is true of transportation lobbyists, environmental advocates and all other special-interest groups. No budget ever will make anyone entirely happy. This budget proposes to eliminate more than 300 programs and cut many others. It would increase spending on education, preventive health care, research, highways and air transport. Those whose programs would be eliminated or cut will scream bloody murder. Those whose favorite programs get more probably won't think the spending increases are big enough.
The simple fact is: Our political leaders don't have any really attractive choices. We referred earlier to the pressure to "jump-start" the economy. But there is a problem with that metaphor: If your car needs a jump start something is wrong. If you don't fix the underlying problem you can drive around the block, turn off the ignition and you will have to jump-start the car again.
The underlying problem with our nation's economy is debt: American individuals, corporations and our government piled up a mountain of debt in the 1980s. Government should do what it can to assuage the worst effects of the recession and get the economy moving again, but we should not kid ourselves that it can do very much. The president and Congress should focus on policies to promote growth and long-term prosperity. But above all they must do no harm.
President Bush's budget makes progress toward that objective. We only hope Congress and the administration will not get caught up in election-year politics and lose sight of the fact that it would be better for them to do nothing at all than to do something to harm the economy. And higher deficits and debt undoubtedly would cause real harm.
Carol Cox Wait is president of the bipartisan Committee for a Responsible Federal Budget.