Tackling the deficit
IN football, there's nothing like a passing game to get the attention of fans: a wide, soaring throw right down the center of the field, a quick run to the goal post - and victory. And in the politics of late September - in the metaphor of the season - a passing game also makes sense, particularly on a subject as important as the United States federal budget deficit. Congress has gone to the long ball; in the Senate, 31 Democrats joined an almost equal number of Republicans (33) to enact a new enforcement mechanism for the budget-balancing law that would require automatic spending cuts if Congress and the White House cannot agree on a mutual plan to reduce the deficit.Skip to next paragraph
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The measure deserves to be signed into law, as President Reagan decided to do, despite reservations. The new mechanism would mandate cuts in the budget deficit for fiscal year 1988, which begins Oct. 1, by some $23 billion, a sizable part of that from the defense budget.
For the current fiscal year (1987) the deficit is expected to be about $150 billion, reflecting an increase in taxes this year based on changes in the tax law which pulled revenue collections forward. The deficit for fiscal 1988 is projected at $170 billion without action on the deficit. And, in fact, this past week's Senate bill on budget reduction - which would lower the deficit by about $23 billion - is by itself far below the original congressional commitment of $37 billion in deficit reductions.
We frankly would have preferred that Congress and the White House do more than is represented by the deficit reduction mechanism. Still, given the background of the emerging presidential election contest, it is not surprising that lawmakers sought a relatively easy way out on deficit reduction. Congress is willing to accept a modest reduction now and next year to get some action going - but putting off major decisions on the deficit until a new president is in office in 1989.
Meantime, steps aimed at reducing the deficit - no matter how modest - are essential. The recent gyrations on Wall Street, with the stock market soaring up one day, swinging downward the next, are clearly related in part to the deficit. Investors are worried about a resurgence of inflation, which means an upswing in interest rates. But large deficits also help keep interest rates high - by forcing the government into the credit markets.
The White House and Congress must now join together to come up with a specific deficit reduction plan. That will not be easy; both sides are already digging in their heels. But confontation should be avoided. What's needed is mutual action.