REVIEW & OUTLOOK (Editorial): Budget Cutting Made Easy
Congress finally has figured out a way to cut the federal deficit. It's called paralysis. As long as Congress fails to boost the federal debt ceiling it will have the best of all possible worlds. It can appropriate funds to its heart's content, to subsidize farmers, Amtrak riders, subway builders, merchant seamen, doctors, lawyers, beggarmen, chiefs. But if the president can't borrow, he can spend only what the government takes in. So, in a process called "deferral" he simply tells a lot of constituencies, "We'll send you the money when we get it."</br></br>Compared with what we've had, it's not a bad way to run the government. In the process of deferring, the president must make economic choices, deciding, for example, whether it is more important to build a shopping center in Des Moines or protect the U.S. from nuclear attack. Any process that forces such choices represents progress -- a kind of shotgun item veto.</br></br>Congress has demonstrated once again this year that it cannot make economic choices on its own. The separate House and Senate "deficit-reduction" bills to be reconciled this week were properly described to the Associated Press by an anonymous OMB official as mostly phony, except of course for the new taxes. Appropriations bills currently under consideration by the two bodies, for agriculture, transportation, labor, health and education, are billions of dollars over budget. In forecasting federal spending, it is appropriations bills, not budget resolutions, that count.</br></br>So what "deficit reduction" really distills down to is an effort to wangle some new taxes. The Senate wants to introduce the equivalent of a European-style value added (VAT) tax into the American tax system, under the guise of a special levy to clean up "toxic wastes." It also wants to add a new import duty to finance "worker retraining" in the U.S.; since there has never been a huge demand for retraining under existing programs, it must be assumed that the main objectives are revenues and a little discreet protectionism.</br></br>As always, revenue enhancers have some guileful arguments. They say, for example, that just-released budget figures for fiscal 1985 demonstrate that the federal deficit expanded even in a time of economic recovery. The deficit did expand, to $211.9 billion from $185.3 billion the preceding year, and even though the recovery slowed sharply this year there was indeed a recovery of sorts.