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Nation Set for a “Teach-in” on Budget and Taxes

Most Americans are either bored or disgusted by the failure of Congress and the President to reach agreement on a budget and tax program. But the stakes are enormous and rightly demand more of our attention, not less. The subject ultimately affects not only the stock market, but the whole economy; indeed, the well-being of each American family.
Unfortunately, while the budget and tax story, on one level, is simple and on another complex, most media coverage has focused on “human interest” material that is mainly distracting. Thus, during the government shutdown we had efforts to make a national crisis out of closed passport offices and the difficulties of unpaid federal workers. Annoying inconveniences? Yes. Occasional personal hardships, yes. Crisis? Forget it.

A civil servant friend at the Education Department in Washington, D.C. was stopped on the way out of her building by CNN. Would she “go on camera” about the furlough? “Yes,” she said, “but you won’t like what I have to say. Nobody I know is truly suffering, it’s a vacation for most and they all know they’ll get their back pay soon enough. As for me, I think the furlough is okay if it forces some economies in government.”

She was right; CNN did not want to hear that point of view and the reporter and camera crew moved right along, searching for sob stories.

If we ignore the media theatrics as well as the political personalities that cloud this issue, we can see better what is going on. The United States is facing a fairly straightforward problem. Government spending continues to race ahead of revenues. Payments on the debt already soak up $300 billion a year and the deficit is destined to get completely out of control as the huge Baby Boom generation ages. If we do not reduce the rate of growth in spending on Medicare and a host of lesser programs, from farm subsidies to welfare, and increase the private sector savings rate, we cannot sustain prosperity, let alone increase it. Taxes will stay up, interest rates will rise, and ordinary people will have an even harder time getting ahead. Now, when the economy is still strong, is the time to restrain the growth of government spending and let revenues catch up. The alternative, even in the short term? The Business Leadership Council in Washington, D.C. has it right when it says that “the Clinton budget stall may tip the economy into a recession.”

Republicans, as the party that believes in less government, understandably find it easier to rise to this challenge than do Democrats, as the party that tends to support more government.

Nonetheless, President Clinton long promised to provide a balanced budget, even while denouncing the Republicans’ proposals as “extreme.” He even agreed to use for his calculations the famously cautious Congressional Budget Office economic estimates. When he finally did offer his budget it quickly was buried in controversy as deep as this week’s East Coast snowdrifts.

The trouble is, the latest Clinton budget is big on theoretical savings several years into the future and short on serious belt-tightening now. Like St. Augustine in his days as a sinner, Mr. Clinton seems to be saying, “Lord, make me virtuous, but not just yet.”

His overall cuts are a quarter under those of the GOP Congress. This former governor and federalism advocate will not return welfare to the states under a bloc grant; he won’t cut the bloated farm program and he imagines that the taxes U.S. businesses pay overseas can be taxed again as “income” in this country without damaging American competitiveness.

The debate at this level, however, is complex because the numbers keep changing as offers and counter-offers are made. When tax issues are placed in the story, the whole subject becomes even harder to follow. At least there is an American consensus now on the need to achieve a balanced budget in good times, but there is no agreement on what level of taxation is best for the economy, or most moral. Moreover, the tax proposals now on the table are far too detailed to be examined briefly.

Politically, the more complex the better, so far as the Clinton Administration is concerned. With remarkable skill, the President uses these complexities to keep the spotlight off the budget itself and onto the supposedly “cruel and unusual punishment” caused by Republican intransigence. It makes for better TV.

But if the Republicans mostly have been losing the public relations battle, they may be set to win the war. They already have changed the climate of budget debate from a year ago and on some points they have obtained support from even such usually liberal sources as the Washington Post and Cokie Roberts of ABC.

Long debates do have educational value. That is why the Republicans and cooperative Democrats have an opportunity to use the present presidential primary season to undertake a national “teach-in” (to borrow a 60s phrase) on the subject of federal spending and taxes. Let C-SPAN serve as national classroom. As people realize that the ordinary citizen’s well-being, opportunity and security are at stake, the struggle between the Congress and the White House suddenly will not seem at all like politics as usual.

That’s how the loss of the short term publicity battle may be converted into a long term and historical victory for fiscal conservatism and economic growth.

Bruce Chapman

Cofounder and Chairman of the Board of Discovery Institute
Bruce Chapman has had a long career in American politics and public policy at the city, state, national, and international levels. Elected to the Seattle City Council and as Washington State's Secretary of State, he also served in several leadership posts in the Reagan administration, including ambassador. In 1991, he founded the public policy think tank Discovery Institute, where he currently serves as Chairman of the Board and director of the Chapman Center on Citizen Leadership.