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It Should Be Simple

November 08, 1987

Just what is it these budget-deficit negotiators from Congress and the White House are fussing about? Finding $23 billion out of a $1-trillion budget should be simple--perhaps the equivalent of someone packing his lunch to work one week of the 52 rather than eating in the company cafeteria.

The nation's budget dilemma might be simple if it were strictly up to the accountants. But budgeting is a highly political process. And since Ronald Reagan became President, the budget has become a supercharged symbol for all the major differences between him and Democrats--and, not infrequently, Republicans--in the Congress. Reagan has managed to manipulate the budget and make it the whipping boy for everything he dislikes about the federal government.

Reagan's Administration has compiled more federal debt since 1981 than all the other Presidents in American history. Still, Reagan insists that the deficit is Congress' fault, that his 1981 tax cut and increased defense spending had nothing to do with the deficit and that the deficit would be under control if Congress had not ignored his own budgets.

In 1983, Martin Feldstein, then chairman of the President's own Council of Economic Advisers, exposed that charade: "The things that raise the deficit are defense spending, interest on the national debt and the tax reduction."

Consider the record:

--The 1981 tax cut that was supposed to bring in more revenue cost the nation $750 billion over five years. The personal income tax now brings in less money in proportion to gross national product than it did in 1981.

--Defense spending has not been cut, but has increased, in constant dollars, from $208 billion in 1980 to $304 billion last year, a cumulative increase of about $2 trillion.

--Congress actually spent less in the past six years than Reagan asked it to.

--Rather than being bloated, the traditional domestic budget has been shrunk to its smallest level since 1961, to about 4% of gross national product. This is the part of the budget over which Congress has some real control and the part which Reagan insists on cutting even more. It excludes such fixed costs as interest on the debt, Social Security and other entitlement programs like federal pensions.

The discretionary domestic budget includes all the traditional functions normally associated with the federal government: highways and airports, agriculture, foreign aid, veterans benefits, environmental protection, education, national resources, the space program, the Weather Service and so on. In fact, Peter G. Peterson, a Republican former commerce secretary, said the nation could eliminate all of this and fire the entire civil service, and the federal government still would be running a deficit.

Even so, the President continues to blame the budget deficits on Congress and talk of runaway domestic spending at the expense of the Defense Department, and to insist that tax increases lose the government money and tax cuts bring in more money.

That's what the fuss is all about.

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