BIG MONEY: How to Deal With the Deficit We Have the Blueprints in Hand for a Balanced Budget
With the election over, itÛªs time for both parties to get serious about the federal deficit Congress and the White House can follow two excellent blueprints, both viciously attacked during the CMMOTUyH campaign and both moving in the</br></br>Republicans' ÛÏContract With AmericaÛª and the Democrats' ÛÏRivlin memo," an Oct 3 option paper by budget director Alice Rivlin that was leaked to the press.</br></br>The similarities between these documents are striking. They agree that, despite last year's budget agreement there's a fiscal crisis ahead. While the deficit this year is expected to drop below $170 billion, it will start rising again next year and hit a record $319 billion by 2002.</br></br>Both documents see a balanced budget by the year 2000 as a sensible target With cooperation between the parties, itÛªs really not so hard to achieveÛÓand, if you want, you can do it without touching Social Security.</br></br>The Rivtin memo estimates that if the budget Is balanced withå¨ five years, the national savings rate will rise to 6.1 percent That will almost certainly mean a higher standard of living as private investment increases. But if the budget continues on its current path, the savings rate will be a mere 3.7 percentÛÓa disaster for the United States in a competitive global economy where other nations save far more.