ONE way to grasp the inadequacies of the budget compromise that emerged last week from the so-called ``budget summit'' in Washington is to notice what are the really ``big-ticket items'' in the federal budget. The biggest item of all is defense, at roughly one-third of the total United States budget.
The second-biggest item is social security, at roughly one-fifth of the total.
The third is interest on the debt, at roughly one-sixth of the total.
The entire federal budget would be balanced automatically if the interest on the public debt could be eliminated magically. Annual interest just about equals the amount of the deficit.
Obviously, the interest on the public debt cannot be eliminated without first eliminating the debt. This is not likely to happen now, or ever. But the more nearly the budget is brought toward balance, the less additional interest will be added to the interest burden on the taxpayer each year.
Failure to move substantially toward budget balance means an annual creep upward in the amount of the interest burden on the taxpayer, and on the credit of the United States.
The joint committees of Senate, House, and White House never for an instant even tried to eliminate all of the deficit. Their aim from the beginning for the first year of a two-year package, from $23 billion to $30 billion, which, in theory is enough to bring the deficit for fiscal 1988 to a little under $150 billion.
They could have done a lot better than this had they dared to touch social security, at least on the fringe. No one proposes to cut any social security payments, but the idea has been floating around that just perhaps the proposed 4.2 percent ``cost-of-living adjustment'' (COLA) for 1988 might be postponed. That would save about $6 billion. A more modest proposal would be to trim the 1988 COLA from 4.2 percent to 2.8 percent. That would save about $2 billion.
Another idea that circulated during the early days of the budget summit meetings would have been a gasoline tax. Various amounts were suggested. Nothing was done in this quarter.
Social security and gasoline are both sacred cows. Curiously, defense is less sacred. It is going to be cut from the President's original 1988 budget by about $5 billion.
The total cuts that have been worked out under the budget summit compromise are estimated to come to $30 billion, provided the enabling legislation (still to be written) comes up to expectations and promises.
But if the people who govern us in Washington had the political courage to do so, they could perfectly well have cut the deficit by another $20 billion at least, which would have reduced the deficit by a third and at least opened the possibility of further cuts in ensuing years. This might have seen the United States move decisively toward not only a balanced budget, but also toward a stabilized dollar.
There is as of this week, in the wake of the budget summit, no basis for looking ahead to a stable dollar.
The conferees have done what so many governments in times past have done. Rather than balance the budget, they have clipped the coinage.
Look at the edges of any coin in your pocket. The pennies and nickels are smooth-edged. They are not worth clipping. The dimes and quarters have milled edges. Both once were silver. The milling around the edge was the device that modern treasuries adopted to stop the old practice of clipping the coins. It worked. But governments have long since learned that there are other ways of easing the debt burden besides actually clipping the coinage.
The modern government that lacks the political courage to keep deficits at a reasonable level (meaning a level that can be funded without progressive devaluation) is doing exactly what many a medieval king did when he sliced off a sliver of gold or silver from every coin that came into his hands.