
                         Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: SUNDAY, November 27, 1994                   TAG: 9412290002
SECTION: EDITORIALS                    PAGE: G2   EDITION: METRO 
SOURCE: 
DATELINE:                                 LENGTH: Medium

WARNING SIGNS OF DEFICIT ILLNESS

DURING the fall congressional campaigns, GOP leaders listed revival of a balanced-budget amendment as a high-priority item. From that, you might conclude that the newly Republicanized Congress will be similarly interested in balancing the budget.

It could well be. But calling for a balanced-budget amendment is a sound bite; progress toward a balanced budget is sound policy. The two aren't necessarily the same - especially if debate over grand-sounding constitutional amendments takes precedence over the hard choices and nitty-gritty of actual deficit reduction.

Balancing the budget over five or six years would cost more than $700 billion, not counting what's needed to pay for new tax cuts. Here are seven warning signs of budget-balancing trouble - signs that fiscal reality, not to mention the intelligence of the citizenry, isn't being taken seriously.

Watch out if:

Robert Reischauer, director of the Congressional Budget Office, gets the ax from a patronage-impassioned and books-juggling GOP. The CBO has earned bipartisan respect for accurate tallies, honest forecasts and the courage to puncture overly rosy budget scenarios. (It destroyed, for example, the Clinton administration's shaky cost projections for its health-care plan.)

Congress starts changing the rules for counting the deficit - for example, by lifting the Clinton budget's caps on discretionary domestic spending on the grounds of projected revenue-raising economic growth. Changing the rules in the middle of the game would mask deficit-reduction failure, and so hinder efforts to reverse the climb of the national debt as a percentage of gross domestic product.

Empowerment gives congressional Republicans a kindlier attitude toward pork. Pork projects are easy to criticize when you're not getting your share; will new opportunity erode old principle? Keep an eye on defense-policy "review": It could prove a euphemism for military pork.

Elected officials refuse to face up to America's No. 1 fiscal problem: runaway entitlement programs such as Social Security and Medicare. Whether by means-testing or other methods, the growth of mandated federal spending has to be capped if the national debt is ever to be brought down. Continued political demagoguery and escapism won't erase this fact.

Agricultural subsidies aren't butchered. Federal welfare for agribusiness costs some $10 billion per annum. But if these beneficiaries are less needy than welfare mothers, they're also more Republican. Note that House Majority Leader-to-be Richard Armey, an economist and heretofore sharp critic of farm subsidies, is already sounding a retreat.

Congressional budgeteers assume that welfare (AFDC-style) reform is a free lunch. It isn't. Destroying the dependency cycle promises mid- and long-term savings, and is worth the effort for other reasons, too. But fruitful welfare reform entails short-term costs: health insurance, help in getting jobs, child care, stepped-up enforcement, etc.

Tax-cut fever engulfs Congress. The anti-tax tide is running strong among House Republicans, but the hard truth can't be washed away. Some proposals would balance the budget within five years. Others would cut taxes substantially without worsening deficits. No realistic plan can do both.

by CNB