President Clinton's State of the Union address triggered a predictable partisan response. Gov. George W. Bush denounced its "litany of spending programs," saying that it "proves my point" that if the surplus is left in Washington, "The money will be spent on bigger government." House Speaker Dennis Hastert vowed to "dig out of an avalanche of presidential spending initiatives."
Congressional Democrats naturally applauded a speech that stroked every party erogenous zone, from comparable worth to hate crimes, Head Start to prescription drugs. Lost in this exchange is how conservative, if not reactionary, the president's program is.
The basic question facing the country is what to do with the opportunity prosperity provides. If Congress continues spending as it has in the past, budget surpluses are now projected at about $2.4 trillion to $2.7 trillion over the next 10 years. (The larger numbers make the unlikely assumption that the Congress will make cuts with the budget in surplus that it wouldn't make when it was in deficit.)
All such projections are guesses written in shifting sands, but clearly we have a historic opportunity to address some of the "great goals" the president laid out in his speech--ensuring that all children go to school ready to learn, guaranteeing affordable, comprehensive health care for all Americans, revitalizing schools for the next century.
What does the president propose we do? He pledges to spend more than $2.7 trillion in paying down--eventually eradicating--the national debt. The rest of his program--the 10-year commitments of $350 billion in tax cuts, $200 billion more for the Pentagon, $110 billion for prescription drugs, the "litany" Bush derides--all essentially depends upon future cuts in spending, robbing Peter to pay for Paul.
Republican presidential contender Sen. John McCain has this right. Debt eradication is a conservative agenda. The president is offering us Calvin Coolidge without the silence. No wonder Republicans agree. They too would devote at least $2.3 trillion to deficit reduction. The large tax cuts Bush endorsed would be paid for by cuts in current levels of spending.
This is a curious choice. It is as if a prosperous couple decide to devote their rising incomes to paying off the mortgage on the house, even though they don't have adequate health insurance, are raising one child in poverty, couldn't afford to send another to college, haven't repaired leaks in the basement and have retired parents who can't afford the drugs they need. Most Americans would think that, even if they decide to reduce their mortgage payments, they'd be well advised to invest a good portion of their raises in more pressing needs.
Of course, debt reduction is portrayed as "saving Social Security first" and "bolstering Medicare" by devoting the Social Security surplus to paying down debt. This began as a clever political ploy invented by the president to trump any Republican tax cut by claiming that it would raid Social Security.
Now voters are being fed a distortion--that "locking away" the Social Security surplus, using it to pay off the debt, helps to "save Social Security." In fact, the Social Security and Medicare Trust Funds will hold the same notes from Treasury whether the money is used to pay down the debt or provide every child with Head Start.
What "saves" Social Security is a healthy economy. If the economy grows, there is no Social Security crisis. If the economy falters, Social Security will have to be subsidized when the boomers retire.
Paying down the debt makes it easier to borrow money when that day arrives or when the economy turns south. But so long as the economy grows faster than any deficit, the burden of the debt is being reduced. It already has dropped about 20 percent as a percentage of the economy during the past three years and is now less of a burden than the debt of any other major industrial nation. With the economy humming, we could easily devote, say, $1 trillion over 10 years to debt reduction and still have another trillion to spend on pressing needs.
And sensible investments in health care, education and training, Head Start, science and technology are arguably more likely to strengthen the economy--and thus "save Social Security"--than eradicating the national debt.
That, of course, has been the classic argument of the Democratic Party. No one made it better than Bill Clinton in his 1992 campaign platform, Putting People First. Now it has been abandoned in the successful effort to foil Republican tax cuts. But Democrats and the nation may pay a large price for that tactical success. If the Democratic President embraces a Coolidge economics, who teaches common sense to Americans?
The writer is co-director of the Campaign for America's Future.
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