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When President Clinton announced that he had found an additional $1 trillion in surplus money that would be coming into the treasury over the next 15 years, there was widespread partying in the nation’s capital and cries of “Let the good times roll!” No one questioned the fact that the president had to reach out to the year 2015 to find this new money. The White House, members of Congress, the bureaucrats, the lobbyists all were too busy trying to decide how to spend it. Spending our hard-earned money is what Washington does best. It’s what gives our elected representatives and all those bureaucrats their power.
Budget forecasting is a fine art. However, budget forecasting beyond a five-year period is folly, and trying to predict what our economy will be like 15 years down the road is sheer nonsense. The non-partisan Congressional Budget Office estimate was more sensible, cutting the estimated surplus in half and only venturing 10 years into the future.
Nevertheless, this latest estimate did not stop the partying. The people we have sent to Washington to protect our interests are still celebrating. The reason is obvious. They are too anxious to throw off the shackles of the Balanced Budget Act of 1997 they signed with Mr. Clinton. Like all recent budget agreements, it began with a rash of new spending and, in this case, a few small tax cuts in order to get Democrats, Republicans and the White House together. Budget cuts were not scheduled until three years down the road, which is an eternity in Washington.
The witching year finally has arrived and Congress is required to make the first real cut in discretionary spending, a mere $10 billion, which is a pittance in a $1.7 trillion budget. Even with a $15 billion defense buildup, this does not offer much of a challenge to anyone seriously interested in cutting our bloated government down to size.
With or without this newfound funny money, it is important that Congress adhere to this budget outline. Republicans won the right to control Congress by promising to shrink, not expand, our federal government. The only way to shrink government is to cut spending.
Sadly, our Republican leaders have not demonstrated that they are serious about doing this. Each of the appropriations bills passed thus far spends more, not less, than the previous year. Worse still, leadership scheduled the most controversial and difficult bills last. It appears that they are carefully orchestrating another train wreck with the biggest cuts scheduled for the Veterans Administration, Housing and Urban Development and Heath and Human Services.
In August, they are prepared to throw up their hands and say, “An agreement is impossible. We have to work out another budget plan and push real cuts further down the road.” This is the same trick used so successfully by Democrat leaders of Congresses past. The cuts never get passed and government keeps growing and growing and growing.
Last week there was another ominous sign that Republicans are getting ready for a new round of spending. The Comprehensive Budget Process Reform Act (H.R. 853) was not brought to the floor of the House of Representatives as anticipated and there is no word on when this much-needed piece of legislation will be considered, or if it will be considered at all.
According to the CBO estimate, when you take out the surplus Social Security money, you are left with a mere $15 billion surplus for the year 2000, which is just enough to cover the projected increase in defense. We must insist that Congress adheres to the Balanced Budget Act of 1997 and make whatever cuts are necessary to stay within the budget caps and cover any new spending. This is essential if our Republican leaders are going to deliver on that promised tax cut.
Stephen Moore, the head of fiscal policy studies at the CATO Institute, has pointed out that the term “budget surplus” is really a misnomer. In reality it is a tax overpayment, and in a period when federal taxes command the highest proportion of economic output in peacetime history, the excess should be returned to its rightful owners.
So, let the good times roll, as long as the surplus is used to roll back the tax rates.