Don't make a federal case out of balancing the budget.

THESE DAYS IT SEEMS DEMOCRATS AND Republicans can't find much of anything they agree on. But in a rare display of bipartisanship last year--albeit one preceded by months of budget gridlock culminating in the mortifying spectacle of the multiple shutdown of the federal government--they did manage to grip and grin for the cameras on one issue: committing the United States federal government to a balanced budget by 2002. In fact, during the election season, representatives of both parties seemed to outdo each other in noisy outbursts of fiscal responsibility-ism.

Some would guess this is good news. After all, it's hard to imagine a business enterprise as complicated as, say, your neighborhood candy shop continuing to operate with the budgetary bon vivants the U.S. government has sustained over the last 17 years. Though the nation has maintained annual deficits through much of this century, the costly habit began to attract broader public attention during the Carter administration when it became a favorite campaign issue for then-candidate Ronald Reagan. Ironically the deficit didn't truly come into its epic, "Somebody call Guinness" form until the "trickle down" years of the Reagan and Bush administrations, when massive tax cuts were joined with breathtaking increases in defense spending to produce in 1992 a post-World War II deficit high of $290 billion.

Because of such inspired accounting procedures, debt servicing, that is the annual cost of paying interest on the national debt, will hover around $240 billion for years to come and has advanced to the top of the list of federal nondiscretionary spending--rivaled only by our $260 billion defense budget. That's $240 billion that the federal government must pay off the top before it builds another hospital, renovates one of New York's late 19th-century high schools, "reforms" another social program, or buys another billion-dollar B-2 bomber.

Annual deficits persist and now contribute to a total national debt that is fast approaching $6 trillion. As most taxpayers realize a trillion here, a trillion there--pretty soon you're talking about real money. It's no surprise that the notion of balancing the budget should offer such broad appeal to the American public. When you're mulling over your checking account or filling those empty moments outside the assessor's office calculating just how much your great-grandchildren's share of the national debt will be, it's hard to find fault with an idea that has such common sense appeal as balancing the budget. Deficit spending can't be a good thing, right? Everybody knows that you can't get away for too long spending more than you earn; there's not many banks out there that would let even the most loyal of customers kite their monthly utility checks.

Our worthy legislators were quick to sense some easy votes--er--the public mood, and the contemporary obsession with the balanced budget began. Even an idea as controversial (and wrongheaded) as making the balanced budget a permanent obligation under the Constitution has enjoyed support from both parties and a good segment of the voting public.

But before Americans start celebrating the new era of fiscal cooperation in Washington, they may want to take a few minutes and consider what kind of future the nation has committed itself to in our seven-year budget balancing act. They might ask: Why the rush now to balance the budget after years of deficit spending? Many economists do not share Washington's sense of urgency over the budget. In fact they fear that an overaggressive assault on the budget could have a calamitous effect on the American economy.

Are our political leaders making policy based on rational economics or election-year sloganeering? And, even if everyone accepts the desirability of a balanced budget, does the nation really have to achieve a balance in such a short period of time--regardless of the economic and social uncertainties that lie ahead?

In 1997, the $1.6 trillion federal budget is projected to run about $140 billion in the red. That's no small amount, but it is one of the lowest deficits in 20 years and suggests that the nation is already on the road to the budgetary black. Continued restrained deficit spending is not likely to add much more of a burden than the nation is already carrying, despite the smug doomsdayisms of those fixated with balancing the budget.

Over the next few years as the era of small government begins, the national deficit will be whittled further down, our legislators assure us, until it reaches zero. The hope is that general prosperity and pleasantness will be the result; interest rates will be lower, investors more secure, more capital liberated for investment and job creation, the government more fiscally stable than it has been in a generation.

The question remains, however, if balancing the budget will truly mean a net improvement for the nation's real bottom line, something that Catholics know as the common good. Among all the numbers, statistics, and competing economic theorems, it's easy to forget that all this talk of budget cutting in Washington isn't really about dollars and cents; it is about real people leading real lives; it's about services that will diminish or disappear; impoverished lives and crumbling highways; it's about priorities and hard choices. It's about who will be hurt and who will be helped. If the budget is to be balanced, it may be balanced solely on the backs of certain of our fellow Americans in the form of lost services and jobs, fewer educational opportunities, even more anemic health care, and the continued decline of the national infrastructure. It's already happening.

ACCORDING TO THE CAMPAIGN FOR NEW Priorities, the 1997 budget calls for a $400 million cut in the Direct Student Loan Program and teacher training; a $730 million reduction in environmental programs; $2.6 billion from food stamps and child nutrition programs; $360 million from job-training programs; $1.9 billion from federal housing programs; and almost $300 million in support for the homeless. These are not just budget cuts; they are policy decisions that say a painful lot about the kind of nation we are and the kind of nation we will be.

The recent "reform" of welfare is a disquieting indication of exactly how Washington's budget balancing is likely to proceed. In a fiscal year that saw the Pentagon rewarded with over $10 billion more for defense spending than it even requested, federal legislators embarked on a massive social-engineering experiment that will eventually cut nearly $60 billion from support services, such as food stamps and public aid meant for the nation's most vulnerable people: single mothers with children, legal immigrants, the disabled, and the mentally and physically dislocated. What these people have in common is more than their vulnerability; they also don't enjoy the protection of powerful lobbyists fighting for their share of the federal pie, and they are among the least likely to make their voices heard in the nation's voting booths.

So over the coming years as federal legislators strive mightily to live up to the pledges they've made to balance the budget, these most vulnerable will continue to be the unfortunate targets of Washington fiscal redlining. And to what end? Like the homeowner who ignores his rotting roof but prides himself on keeping his accounts straight, we can pride ourselves on achieving a balanced budget in seven years. But that pride won't amount to much when the roof collapses over our heads. A truly vital society requires ongoing investment in human lives through better health care and education; and investment in the mundane and invisible--highways, airports, transportation hubs, clean air and water ways. The United States lags behind the industrialized world in nonmilitary research and development while our defense spending continues to double and triple the spending of all of our so-called international rivals combined.

Balancing the budget will be about hard choices, real investments, and limited resources especially since raising taxes to close our deficits appears hopelessly out of the question. The United States is already committed to costly automatic spending through Medicare and Social Security, and future resources will be strained by the weight of the debt the nation already carries. That does not leave a lot of the budget left over for all the other things a nation is required to do for its citizens.

Which investment in America's future is the worthier to make? Another $450 million for military helicopters the army didn't even request or $400 million for an educational-support program like the GI Bill. Three generations have passed since that investment was made in America's future, three generations which have all been enriched by the payoff from that "big government" investment plan. We have to be smarter about how we invest our tax money. One way to start being smarter is to resist quick-fixes and kneejerk policymaking like setting arbitrary appointments with a balanced budget.

By all means, yes, let's strive for a balanced budget, but let's not succumb to an unbalanced obsession with the idea of the balanced budget. It is a better future for all Americans that should guide our budgetary prioritizing, not just a better-looking bottom line.

RELATED ARTICLE: FEEDBACK

Each month, advance copies of Sounding Board are mailed to a representative sample of U.S. CATHOLIC subscribers. Their answers to questions about Sounding Board and a balanced selection of their comments about the article as a whole appear in Feedback.

The best way to begin the nation's deficit reduction is:

To spend less on foreign aid, senate and representative travel, and buy less surplus materials--our government has tons of surplus goods just rotting away.

William R. Wilder St. Louis, Mo.

To elect government officials with common sense about spending and an understanding of our federal government's responsibilities.

Bernie Zollner Woodburn, Oreg.

To rethink our notion as to who is entitled to Social Security and Medicare. Anyone who was blessed by God enough to do well financially should not receive it.

Nick yolk Walford, Iowa 

Welfare reform is a start! Welfare reform will be a blessing in time; we need standards so people don't take advantage of tax payers' bucks.

Sylvester Larrabee, Jr. New Boston, Tex.

To cut defense spending, get rid of programs and subsidies that have outlived their original purpose, and then, if necessary, raise the taxes for families well above the poverty level.

Marion R. Hultin Rocky Hill, Conn.

Current congressional spending should be prioritized, and some outrageous spending should be halted: fancy trips to cover a day's work, entertainment, lobbying, and so on.

Maryanne Trask South Euclid, Ohio 

To cut "pork barrel" spending by prohibiting members of Con gress to vote on spending in their districts, to impose term limitations on Congress, and prioritize congressional programs.

Deacon William Van Dril Allegan, Mich.

To cut out all the silly government funded studies--how bees mate; preserving endangered species at enormous expense; and prisons like country clubs.

Name withheld Yorba Linda, Calif.

The federal budget should/should not be balanced because:

If we all have to live on a personal budget, so should elected officials. Congress receives enough of our tax dollars to balance the budget.

Name withheld New Orleans, La.

The federal budget should not be balanced because in doing it the least able will be hurt the most.

Name withheld Seattle, Wash.

We are the wealthiest nation in the world. It is immoral to waste $240 billion a year on interest that could be used to prevent hunger in children or to provide the poor with health care.

Debb McRoberts Troy, N.C.

I'm not an economist, but common sense mandates that we not continue to live on credit.

Joan Perell Chicago, Ill.

Balancing the federal budget should be a goal--something to strive for--not an absolute that must be attained without regard to people's lives.

Dorothy Karhnak Woodbridge, Va.

Deficit spending is a morally wrong way of living.

Dale Brabham Elmira, N.Y.

No one pays off their home the year they purchase it. The federal budget should be made up of a capital budget and an operating budget. Capital items can be depreciated over the life of the items, so borrowing is legitimate.

Tom Grebel Santa Ana, Calif.

Withdrawing massive funds from the economy may lead to a major recession or perhaps even a depression.

Name withheld St. Petersburg, Fla.

The federal budget should be balanced. It's not fair for my children and grandchildren to have to pay for a previous generation's debt.

Name withheld Lutherville, Md.

As a nation I'd rather carry some debt and show compassion to those who need it than make those who are already marginalized in our society pay.

Cecelia Doherty Alameda, Calif.

The way I'd like to see the federal government invest my money is:

Wisely.

John E. Kveton Abernathy, Tex.

The federal government should set up investment vehicles, like bonds, to assist communities to repair and rebuild our cities.

John Heinsz St. Louis, Mo.

I'd like my money to help those of us who really need assistance.

Mary Bortell Knox, Ind.

In education aid at all levels--from elementary schools to colleges. The young of this country are our future and we should invest in them for a better America.

Ron Pretzer Kalamazoo, Mich.

Into programs which open doors and provide opportunities for people so they're not welfare dependent.

Mike Haney San Antonio, Tex.

The federal government should let me put my tax money in an investment account so I don't have to depend solely on social security.

Justin Brigiotti Miami, Fla.

Money should be invested in slow and gradual bonds. The talk of stock speculation just begs for another Great Depression.

Jack Gergotz Cleveland, Ohio

Military personnel in peace time should engage in community service projects, and direct corporate subsidies should tee spent on community building, a just wage scale, health care, and employee profit-sharing.

James DiLuzio Los Angeles, Calif.

Comments:

It's okay to borrow money, but borrowing implies repayment, and that should be acknowledged in the budget.

Name withheld Cedar Falls, Iowa 

Without a constitutional amendment, the budget will never be balanced.

Bill Giel Whitehouse Station, N.J.

Since when do we need a constitutional amendment to balance the budget? I thought Congress had the power to do so. Or is it they prefer to waste time and money on smoke screens?

Marie P. Getty Mays Landing, N.J.

I fear the debt is so astronomical and unreal that most of us have adopted an "I don't care" attitude toward the budget. If we don't care some voice will enter this arena and change the way we do business--then it will be too late for any of us to care.

Dean Baldwin Fallston, Md.

When Kevin Clarke lists "the most vulnerable" he should add the sinking middle class who pays for all the giveaway services and reaps none of the benefits.

Jeanette Hall Indianapolis, Ind.

I do not want to see our national deficit any higher, but we need to keep the welfare of the nation as our top priority.

Margaret Mages Lafayette, Ind.

Does every legislator need an army of clerks, secretaries, and advisors? Congress could start toward a balanced budget by getting its own house in order.

Marshall Peterson Oak Lawn, Ill.

Let's face it, we can't continue to spend like it's business as usual. No business would last long on a deficit budget. The government needs to hire a business manager who would rule the budget with an iron hand.

Gerard Beavdette Leniston, Me.

(All comments used in Feedback must be signed, but we withhold names on request. We regret that space limitations force us to condense letters and that many cannot be used at all. We try to reflect major opinion trends accurately. Our thanks to all who wrote.--The Editors)