June 23, 1995

It’s Not as Easy as It Sounds

Deficit reduction is the main topic in Washington this year. After President Clinton’s 1993 deficit-reduction plan was enacted, federal red ink took a back seat to the health care debate. But it’s back and likely to be the number one issue in the 1996 presidential campaign.

President Clinton took the lead in reducing the deficit during his first year in office, but now he seems uncertain where he stands—partly because he has received so little credit for his 1993 accomplishment.

Until recently, the president’s strategy on the issue had been to attack the Republicans for proposing to cut Medicare, Medicaid, and other important government programs and for supporting tax cuts for the rich. This approach apparently didn’t hold water with the public, however; he clearly has lost the initiative there. A recent Wall Street Journal/NBC poll finds that 37 percent of Americans now say Republicans would do a better job of reducing the deficit; only 16 percent pick Democrats. Shortly after the president took office, the poll showed the opposite: 39 percent picked the Democrats, and 16 percent the Republicans.

The turnabout in public opinion may explain Mr. Clinton’s recent about-face—he now proposes to balance the budget in ten years, with cuts in Medicare and Medicaid. This has enraged many Democrats, who believe their strategy of blaming the Republicans for cutting popular programs was a winner.

The Journal/NBC poll also indicates that the public clearly is unaware of what it takes to balance the federal budget. There is solid public opposition to any substantial cuts in Social Security, Medicare, and Medicaid, but large majorities also oppose eliminating the three departments targeted by the Republicans—Education, Energy, and Commerce.

After resisting deficit reduction for years because it was too difficult, Washington politicians now are guilty of making it appear too easy—all we have to do is slow the growth in spending—not touching Social Security, of course, which is 26 percent of federal spending (excluding interest on the debt). If it were that easy, it would have been done years ago. Spending rises because of inflation, higher caseloads, and the demand for more services. Even slowing growth in programs such as Medicaid and Medicare will require real cuts in benefits.

The right time to balance the federal budget is during periods of economic growth, but it nevertheless will be painful—economic growth will be dampened in the short run, state and local governments will lose billions, life will be tougher for the less affluent, and the middle class will lose benefits they have come to expect. It is time for the politicians to admit this and for the rest of us to understand that life involves choices—many of them very difficult.