Senate Debates Priorities For `Peace Dividend'; Measures Indicate Political Nature of Issue
The Senate asked itself yesterday whether it wants to use any "peace dividend" to reduce deficits, increase spending or cut taxes. The answer was yes.</br></br>In the opening of what is expected to be a long, contentious and highly political debate on the issue, the Senate indicated in two nonbinding resolutions that its first priority is deficit reduction and that it puts spending on "urgent national priorities" only barely ahead of tax cuts.</br></br>But mainly, yesterday's votes demonstrated that the issue is far from resolved and underscored the political opportunities and hazards that face both Democrats and Republicans as they attempt to deal with the fiscal fallout from peace and reap the political rewards.</br></br>The debate signaled agreement among many conservatives as well as liberals that there will be at least some peace dividend, although probably relatively small at the start, as easing of East-West tensions causes reductions in military spending. But there was little agreement on the size of the windfall, and the Senate came perilously close to saying it should be used for everything.</br></br>The early test of wills on the peace dividend issue began when Sen. Phil Gramm (R-Tex.) proposed a "sense of the Senate" amendment urging that any savings left after deficit reduction targets are met be "returned to America's taxpayers" in the form of tax cuts.