THE VIRGINIAN-PILOT
Copyright (c) 1995, Landmark Communications, Inc.
DATE: Monday, May 15, 1995 TAG: 9505120025
SECTION: FRONT PAGE: A6 EDITION: FINAL
TYPE: Editorial
LENGTH: Medium: 77 lines
Courageous or foolhardy, Republicans in House and Senate have now offered budget resolutions that would slow government spending to reach balance by 2002. Virtually no programs other than Social Security and defense are untouched, but the biggest savings will come from entitlements.
Medicare, Medicaid, federal pensions and veterans benefits would all take a hit. Social Security has been called the third rail of American politics - touch it and you die. But polling shows that seniors are just as protective of Medicare. Yet the Republicans don't just touch it, but propose savings that amount to $250 billion over 7 years.
Republicans argue that since the program will go bankrupt if nothing is done, change is inevitable. They offer few details and call for a bipartisan commission to solve the problem. However, seniors will inevitably have to pay more for Medicare, with the affluent bearing the largest increases. Services may also be scaled back and choice will be limited as participants are pushed to join managed-care plans that put the squeeze on costs.
Big cuts run through the budget, from subsidies for farmers to federal paychecks. National parks and the National Institutes of Health would face 10 percent cuts. Three Cabinet departments - Energy, Commerce and Education - would be eliminated. So would 13 agencies and 69 commissions.
Democrats argue that Republicans are offering huge tax breaks to the wealthy while snatching the safety net away from seniors and the poor. They are indulging in more than a touch of demagoguery, but the structure of the Republican plan gives them an opening. Though it seeks balance in accounting terms, it is unbalanced in terms of who bears the pain.
Upper-income earners would get a disproportionate share of tax benefits. Seniors and the poor would take the biggest hits. In addition to restraining Medicare growth (even as the ranks of seniors swell), the plans call for $175 billion less for Medicaid, $80 billion in welfare cuts and an assault on the Earned Income Tax Credit once praised by Ronald Reagan for encouraging the poor to get jobs.
Democrats should offer counterproposals rather than try to polarize the debate. Sniping from the sidelines is fun, but it won't solve the problem. There's room for improvement because Republicans are trying to reach balance the hardest possible way. With defense, Social Security and new revenues off the table (not to mention a House plan that tries to reduce taxes simultaneously), much deeper cuts in all remaining programs are required.
Compromise on some of these issues would actually make the almost impossible task easier. Social Security probably should be means tested. Putting defense off the table is questionable. Corporate welfare should be hit harder. Increased revenues from those who can afford it is reasonable in any plan hoping to distribute the pain equitably.
Still, this budget represents a watershed in American politics. For 30 years, both parties have been willing to pander to voters by practicing borrow-and-spend economics. The result is a sea of red ink, a government in perpetual deficit, a dangerously low American savings rate, a millstone of national debt and an immense federal government.
Republicans deserve credit for trying to reverse those ruinous trends. Democrats warn that cutting too much too fast could lead to recession, but the present course is slow-motion suicide. Democrats must get in the game with their own plan for balance. A historic debate is needed. But it's the citizenry whose seriousness is now at question.
If voters back reform, reform will occur. But if there's a mad scramble by seniors, farmers, homeowners, students, the health-care lobby, veterans and dozens of other interest groups to keep their piece of the pie untouched, Congress will cave. It will be back to business as usual.
Both sides say the future of the country is at stake. They are right. Do the American people want to get their fiscal house in order? Or do we want to live on borrowed income and leave the bill, and a sadly diminished American Dream, to the next generation? The hard choice is belt-tightening now or a lower standard of living for our children and grandchildren. Congress will do what it's told, but voters must make their wishes known. If squandered, this chance for fiscal discipline may well not come again. by CNB