YOU ARE HERE: LAT HomeCollections

Democrats Prance, Republicans Battle as the U.S. Ship of State Starts to Founder : Budget: Instead of dealing with the deficit and solving the S&L mess, Democrats and Republicans wage a war of recriminations.

August 05, 1990|William Schneider | William Schneider is a contributing editor to Opinion

WASHINGTON — Republicans are beginning to smell disaster. The economy is sliding into recession. War in the Middle East poses a danger to oil prices. The savings-and-loan scandal has acquired a new symbol--not Charles H. Keating Jr., the businessman who bought influence in Washington, or Alan Cranston, the senator who sold it, but Neil Bush, the President's son who traded on it.

The President was forced to abandon his "no new taxes" pledge in June. In July, word of the Administration's tax proposal leaked out. It was greeted by a torrent of criticism. The GOP is openly split over how to proceed, or even if to proceed, with budget negotiations.

Meanwhile, the federal budget deficit has become the country's No. 1 concern. For the first time since he took office, President George Bush's popularity has begun to drop.

The Democrats are enjoying this immensely. They are daring to think previously unthinkable thoughts--like maybe putting up a candidate for President in 1992. (Another Walter F. Mondale? Another Michael S. Dukakis? Why bother.)

The Republican response has been to mount a frantic offensive. Not to avert disaster, but to avert blame. The GOP has started a carefully orchestrated campaign to persuade voters that whatever terrible things happen, it's the Democrats' fault.

While the ship of the state is sinking, the Democrats are dancing on the deck and the Republicans are organizing a court-martial. Nobody seems to care that they're all going to drown.

The budget summit between the Administration and Congress was suspended last week so members of Congress could go on vacation. After three months of negotiations, there is still no discernible progress toward reducing the deficit. "The whole thing isn't going well," one budget negotiator reported. "What we need here is a crisis."

How's this for a crisis: The 1991 federal budget deficit is now projected to be $169 billion--far more than the $100-billion deficit projected in January. That's not counting the $100 billion the government says it will need next year for the S&L bailout--far more than the $50 billion appropriated by Congress last year.

The economy grew by only 1.2% last quarter--far less than projected. That makes five successive quarters of slow growth, the longest period of economic sluggishness since World War II.

And if the President and Congress can't agree to cut the deficit by $50 billion before October, $100 billion in across-the-board spending cuts will kick in. Want to know what life would be like without the federal government? Here's your chance to find out.

So far, the following steps have been taken to deal with the impending disaster. Congress has voted to allow a $322-billion increase in the national debt. The federal government now has the authority to go $3.44 trillion into debt--more than $13,000 per person, in case you have your checkbook handy.

The House boldly approved an amendment to remove the Social Security trust fund from federal deficit calculations. Without the Social Security surplus, next year's deficit would be $245 billion. But we don't have to worry. The amendment doesn't take effect until 1992.

The budget negotiators have also agreed to hold uninterrupted bargaining sessions in September, in an isolated location somewhere outside of Washington. Maybe there is a Betty Ford Clinic for financial disorders. If that doesn't work, Congress may call a lame-duck session for the deficit. Which means that it will take place after the November election, with votes cast by legislators who may have already been turned out of office.

To be fair, Bush did do his part to advance the agenda. He allowed a plan to leak out. The Administration suggested raising the federal excise tax on alcohol. Whereupon wine growers and beer drinkers went nuts, and Anheuser Busch threatened to drive their Clydesdale horses up the steps of the Capitol.

Bush also suggested limiting the amount of state and local income taxes that taxpayers deduct on federal returns. Whereupon the governors went nuts and issued a statement opposing "any restrictions on the deductibility of state and local taxes as unacceptable encroachments on state systems of taxation."

The Democrats, thoroughly amused by all this, decided not to release any proposal of their own. "We did not pledge that every time the Republicans slit their wrists we would slit ours," the chairman of the House Budget Committee said. Whereupon Republicans went nuts and started attacking the Democrats.

Some Republicans even criticized Bush. Rep. Newt Gingrich (R-Ga.) said, "I think it was a major mistake to give up on taxes the way the President did. Even though I'm in the budget summit, if we don't get a very good deal, I am not going to support the summit package." He added, "I wouldn't ask any Republicans to vote for it." That could be a problem for Bush. Gingrich is the House minority whip. His job is to round up GOP votes.

Los Angeles Times Articles