Campaign Told Us Little About Dividing Resources

The 1996 election campaign has mercifully ended - without, however, having contributed to public understanding of the decisions that loom ahead: How do we divide our resources among competing demands?

Cutting taxes means diverting resources from the federal government to the public. This may be desirable, but it ought not to be done without considering the consequences: a larger deficit or reduced services. The arithmetic of the budget dictates that the reductions come in Social Security, Medicare, or Medicaid, the principal beneficiaries of which are senior citizens and, so far as Medicaid is concerned, poor people of any age.

The candidates denied that such trade-offs (reduced services for reduced taxes) are involved, perhaps because they so abjectly pander to the elderly. What might be done: Tax all Social Security payments, just like other pensions. Increase the Medicare deductible on a graduated scale according to the recipient's income. Treat Medicare benefits, up to a predetermined ceiling, as taxable income.

If the elderly were asked to do something for their country, their reaction might be surprisingly positive. But asking them would require political courage and leadership, which we haven't had lately.

There are subtler trade-offs in regulatory policy, perhaps nowhere more complicated than in the environment. Decisions depend not only on economic costs and benefits but also on lifestyle preferences. A resolute clean air/clean water policy will dictate wrenching economic adjustments and, perhaps, social adjustments. Are we prepared to control (maybe ban) the use of fertilizer in Pennsylvania because it washes into Chesapeake Bay? Or to replace dirty coal with clean nuclear electric generating plants (which carry their own environmental risks), throwing coal miners and others out of work?

These are not questions to be decided by engineers on the basis of technical data. These are serious questions of public policy that deserve serious public discussion. Whatever policy emerges won't work unless it is based on informed, solid public consensus. But all we heard during the campaign was mush about protecting the environment while getting the government off our backs.

There is a yet more basic question about the allocation of resources. The campaign produced twaddle about the virtues of small government, the evils of big government, and how people can decide better than government how to spend money. But for what purposes? The argument over taxes is really an argument over public services versus personal gratification. In the extreme case, excessive tax cuts mean starved public services. Consumer spending surges while roads and bridges go unrepaired, schools deteriorate, and equipment wears out. Or if taxes are too high, public services are plush while consumers are threadbare.

Different people are going to have different ideas about where the line should be drawn. The essence of democratic politics is to make public policy out of a consensus that everybody can live with - nobody totally satisfied, but nobody totally dissatisfied either.

The discussion that leads to such a consensus has to be specific, and it has to be honest. What do you want the government to stop doing so that you can have more money for yourself? If it stops providing a service, is the service going to be left undone or is responsibility for it going to be passed on to states and cities?

Take welfare reform. The federal government is saving, or hopes to save, money that can be used for something else - maybe even returned to the public in the form of a tax cut. But until that far-off day when poor people become self-supporting, states, cities, and private charities either have to look after them or watch them go hungry and freeze on the streets. This does not produce a significant net reduction in public spending. The only difference is what used to be spent by Washington will be spent by state or local governments. There may be good reasons to make this shift, but we ought not to kid ourselves that it will save money.

All trade-offs involve sacrifice. Perhaps the saddest part of the 1996 campaign was that the candidates could not bring themselves to talk about this. How soon have we forgotten John F. Kennedy when he challenged us, "Ask not what your country can do for you; ask what you can do for your country."

*Pat Holt, former chief of staff of the Senate Foreign Relations Committee, writes on foreign affairs from Washington.

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