Taking the Easy Way Out

Looking to 1984, Congress and Reagan duck the deficit problem

Trust the approach of a presidential election to concentrate politicians' minds on the gravest threats facing the nation. After many months of bitter wrangling, for example, Congress and the Reagan Administration have at last reached a tacit understanding about what they will do between now and November 1984 to reduce those gargantuan $200 billion budget deficits. In a word, nothing.

What is more, there is impressive bipartisan agreement on the reasons for this course. The deficits may choke off the budding economic recovery, all right, but they may not do it—or at any rate, the damage may not be noticeable—until 1985. Meanwhile, there is no great public clamor for action. So with any luck, both tax increases and cuts in Government spending that might offend powerful groups of voters can be put off until after the elections. And if that turns out to be too late? Well... er... uh...

If all that sounds excessively cynical, it is not much more than a paraphrase of what political powers on both sides are saying. For the Administration, one senior official concedes: "We're done on the policy side. We're out of business. We're waiting for the election." In Congress, the Senators and Representatives who reconvened last week are likely to ignore their own command, expressed in the budget resolution they passed in June, to raise $73 billion in new revenue during the next three fiscal years. Any bill to increase taxes, says Tip O'Neill, Speaker of the Democratic-controlled House, "would have to come from the President or the Republican Party." As O'Neill well knows, the chances of that are zero. "Tip's point is that if the President is not willing to deal with this, he—Tip—isn't going to put Democratic heads on the block," explains a House Democratic leader. "That may be good politics, but it's bad economics."

As to spending, both houses last week passed a bill authorizing $187.5 billion in military expenditures in fiscal 1984, which begins Oct. 1. While that is $10.5 billion below Reagan's initial request, it still marks a 5% increase in outlays, after adjustment for inflation, over the fiscal year that ends a week from Friday. On the civilian side, the House voted to reverse some of the cuts in future spending on a variety of social programs that were made at Reagan's demand in 1981. The House added $1.6 billion to the total to be paid out beginning next fiscal year.