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Republican Financial Plans Ignore Deficit Reduction : The two documents signed by every GOP incumbent and candidate in the Valley call for a balanced budget amendment, but neither details how balancing should be done.

October 23, 1994|ALAN B. UNGAR | Alan B. Ungar is a certified financial planner and Valley chairman for the Concord Coalition, a nonpartisan group whose sole objective is a zero deficit by the year 2000

In election years, legislators and politicians who know better often woo voters with promises that both they and their voters know cannot possibly be achieved. As is often the case, if it sounds too good to be true, and it looks to good to be true, it probably is too good to be true.

Two documents signed by all the Republican incumbents and candidates in the San Fernando Valley follow this tradition. They are the "Agenda for the Republican Majority" released by Senate Republicans on Sept. 21, and the "Contract With America" released by House Republicans on Sept. 27.

Deficit reduction is definitely not a priority in either of these plans. While both of the proposals call for a balanced budget amendment, neither suggests how this balancing will be done. Balancing the budget in five years would require a reduction of approximately $750 billion, which if a cataclysmic consequence to the economy were to be avoided, would have to include a combination of cuts and revenue increases.

Neither of the proposals would help solve the national crises our debt is causing. Neither addresses the projection that by 2012 all of the taxes collected will have to be used just to pay for entitlements and the interest expense. Both actually exacerbate the problem by calling for an increase in the amount of money seniors can earn without reduction in Social Security payments. But the senators tell us not to worry, we'll pay for this by "entitlement reform, exclusive of Social Security. "

That will get them votes, but what about getting serious? Not a word was said about how to really solve our deficit problems. Instead, both plans offer tax credits for children under 18 for families with incomes up to $200,000, both recommend special individual retirement accounts to encourage savings, and both offer a wide variety of other tax cuts and spending recommendations.

At least the House version made specific recommendations on how to offset the spending increases they recommend. The problem is, the cuts they recommend will not be available to get rid of our deficit, only their increased spending. While a balanced budget amendment, term limits and the line-item veto might help the process of getting to a zero deficit, the total Republican promise still smacks of the same old bait-and-switch rhetoric that we have heard from both parties for far too long.

These documents are about getting votes, not about balancing the budget. It is frightening to think that the Administration, which has started working on next year's budget, could get caught up in one-upmanship. A bidding war to see who can promise the most goodies would legitimize political backsliding on the deficit and could make it virtually impossible to enact deficit reduction.

Two years ago, presidential candidate Paul Tsongas told the American people there was no Santa Claus. That is still true today. It's time for politicians to stop pretending to be St. Nick and begin telling voters what tough choices have to be made. Who is going to tell the politicians there is no Santa Claus?

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