Deficit urgency grips US
I have a feeling that there has been a big change in atmosphere here in Washington recently and that the public has not quite caught up with it. President Reagan this week has been getting a critical press and a poor stock market. Much of the change stems back to the new budget. The nation is living well beyond its means and the penalties are beginning to threaten. The economic linkage is complicated, requiring abstruse phrases like ''econometrics,'' but it boils down to the belief of many sober students that unless something is done the deficit will be a staggering $200 billion or so a year for a number of years.
President Reagan has taken the position that the deficit, while worrisome, is manageable; solutions can be postponed until after the election.
Maybe my political antennas are sending me wrong signals, but I think there has been a rather abrupt change of atmosphere recently.
The public is asking about that deficit. It is still true, of course, that politicians hate to raise taxes in an election year. But perhaps 1984 is different. Anxiety seems to have spilled over into the stock market. There was an abrupt fall in prices as the week started. This is only temporary perhaps, but it had a chilling effect. What's going on?
It's not just the stock market. It is in events in related affairs. The new mood seems to be asking for government action. In fact, the argument over the deficit could dominate the election. It was discussed everywhere this week in Washington. Mr. Reagan has opposed tax increases for the time being. ''To those who say we must raise taxes,'' he said, ''I say wait.'' He is supported by Treasury Secretary Donald T. Regan. But members of his economic advisers disagree. The White House told Martin S. Feldstein, head of the President's Council of Economic Advisers, not to appear on a national television program this week because of his adverse views. Federal Reserve Board chairman Paul A. Volcker urges that something be done about the deficit right away. And here is comment on the deficit by Alice M. Rivlin, respected former director of the Congressional Budget Office.
''Congress should do something now. . . . It will be wrong to wait till after the presidential election. It's going to take both tax increases and spending cuts and we should enact those soon, while the economy is booming. . . . To call for tax increases and spending cuts in a faltering economy will be much more difficult. The time for action is right now.''
Suddenly everyone is wondering. And it isn't just a local problem. The US is the world's richest country - how we manage our affairs affects everybody. The less-developed countries of the third world are heavily in debt; they owe some $ 818 billion. They may have to be bailed out. At the same time commercial countries of the free world have a different worry; their balance of trade with the US is uneven. America's lavish expenditures on defense and other matters are distorting its global trade position. Interest rates rise. That makes American goods more expensive to buy abroad and European and Japanese goods cheaper to sell in America. It would help if the United States would cut its deficit.
President Reagan has other problems besides the deficit. Negotiations with the Soviets have almost halted. The nuclear arms race goes on. There is the collapse in Lebanon. Soon the election will take a fiercer turn. Democrats will pick their candidate, and then presumably there will be national debate. Probably Mr. Reagan will blame Democrats for not being more cooperative; Democrats will charge Mr. Reagan with wrong policies. It could be a lively time.
As to the deficit dispute it could hardly occur in a parliamentary nation. In Canada, in London, in Stockholm, the budget is the central economic instrument. If the Opposition gets enough votes to change only a line, there is a dissolution of Parliament and a new election. Generally people know who is in charge, but who is in charge in Washington today? Democrats control the House, Republicans the Senate, and President Reagan tries to conduct the orchestra of politicians and bureaucrats. The leisurely American process has worked pretty well for a century and a half but now the tempo is faster. Should responsibility be clearer?
Washington will probably compromise its way out. It has in the past. It is not an unsatisfactory way when there is plenty of time. But voices are more urgent. The storm has come up fairly suddenly. President Reagan's comments have indicated that until recently he thought the matter could be postponed. That is no longer certain.