An Honest Budget and Honest Cuts for a Change
The task of the budget summit has always been difficult. It has become even more difficult as the economy has slowed and events in the Middle East have accelerated. Increases in the gasoline tax, deeper defense cuts and other options that appeared attractive to some a few weeks ago now must be viewed in a different context. The choices are tougher. But one critically important element of a successful summit hasn't changed -- agreement between Congress and the president on a budget process that will work.</br></br>The existing process doesn't work. Not once since the enactment of Gramm-Rudman-Hollings has an annual deficit target been met. The national debt has tripled -- to $3 trillion -- since 1982. The fastest-growing element of the federal budget is not defense or Social Security or Medicare, but interest on the national debt: Interest payments now exceed $182 billion per year. And all of this has occurred in an era of unprecedented economic growth.</br></br>Persistent deficits producing mounting debt remain the most pressing domestic issue facing our country. The crisis in the Middle East only highlights the danger of leaving ourselves vulnerable, as we are, to external events and economic pressure from abroad. But however bad America's dependence on foreign oil may be, the vulnerability arising from dependency on foreign lenders is at least as dangerous. How often and how vigorously does the borrower or the prospective borrower pick a fight with his or her banker?</br></br>As a practical matter, a solution to the budget deficit problem will almost certainly require increased revenues. But unless the budget process is changed, those new revenues will pay for more federal spending, not deficit reduction.</br></br>Gramm-Rudman was supposed to trigger across-the-board cuts in the budget if Congress and the administration fail to reach agreement on a more selective and judicious reduction package. It has never worked as it was intended to, for four principal reasons: