Pie in The Sky

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In an interview with TIME, Gray suggested that one way of raising revenue might be to impose a "temporary" surcharge on foreign imports that would last no more than three years. Gray estimated that higher fees on imports could raise anywhere from $10 billion to $30 billion annually, depending on the type of surcharges imposed. The duties would have the beneficial side effect of reducing the trade deficit and helping American industries, but would surely invite retaliation by other countries and might worsen the U.S. trading position in the long run. Many economists advocate a more focused tax on imported oil, which would not only boost revenues but also encourage conservation and reduce dependence on foreign supplies.

The least likely step is an income-tax increase. Last month Texas Representative Jim Wright, the incoming Speaker of the House, suggested that the tax-rate cut in the new reform legislation be delayed for the wealthiest Americans. Wright's notion was promptly criticized by members of both parties, and he has not broached the subject since.

More and more economists and Congressmen believe the current Gramm-Rudman target for fiscal 1988 is unrealistic and needs to be revised. If Congress made too drastic a cut in the deficit, they argue, it could throw the sluggish economy into a recession. Says C. Fred Bergsten, director of the Washington- based Institute for International Economics: "I don't think anybody believes that it is either possible or desirable to meet the Gramm-Rudman target." Admits Chiles: "There is nothing magic about $108 billion. But I think you have a problem if you abandon it without something better in its place." House Budget Chief Gray and incoming Senate Majority Leader Robert Byrd have also suggested that Gramm-Rudman may have to be revamped. But the White House would probably object. Says Miller: "If we go back on Gramm- Rudman, the deficit will shoot right up again."

While economists oppose cutting the deficit by too much, too fast, they agree that doing nothing to diminish the level of federal red ink could be equally dangerous. Massive Government borrowing soaks private savings out of the economy, leaving fewer funds available for business investment. Most ^ ominous, the national debt may exceed $2.2 trillion this year. The interest payments on that gargantuan sum already threaten to put an intolerable burden on future generations. Says Roger Noll, a professor of economics at Stanford: "What we will see happen as a result of continuing deficits is the slow, persistent erosion of the health of the U.S. economy."

Like clean air and water, a reduced budget deficit is a public good: everyone benefits from it. At the same time, though, it is in each person's private interest to fight to defend his particular piece of the Government spending pie. Ultimately, America's prosperity will depend on whether its leaders have the courage to put the public good above private interests.