The Nation. - Department of Government at Cornell University

IJune 5, 1995 The Nation. 781Slash and BurnAsexpected, the Republican proposals to balancethe budget by 2002 call for savage cuts in thedomestic public sector. The “moderate” proposalof Senate Budget Committee chairman PeteDomenici would ax domestic spending over the next sevenyears by almost one-third to reach his goal of $1 trlllion insavings. Little was spared: Programs for educatlon, workertraining, infrastructure, health and safety, science and the environmenttook routine cuts of 25 to 50 percent and many wereeliminated. Medicare-supposedly untouchable-will be cut15 percent. The House’s intentions are even bloodier. Budgetchairman John Kasich matched the Domenici cuts and addedanother $360 billion to pay for the promised Republican taxcuts for the rich and still another $92 billion for an increasein military spending.The Republican budget was not without some sleight ofhand. In an effort to share the political backlash, budget plannerscall for a bipartisan commlsslon to specify exactly wherethe cuts in Medicare will come from. And although Kasich hasbilled himself as someone unafraid to cut business subsidies,almost $60 billion In annual corporate tax loopholes will not betouched. The G.O.P. did not come to town to make the richpay for a balanced budget. They know who their friends are.Which is more than you can say for many Democrats.Shortly after the plans were released recently, White HouseChief of Staff Leon Panetta and budget director Alice Rivlinassembled various Cablnet officers to denounce the cuts asheartless toward the poor and elderly, shortsighted towardchildren and dangerous for the economy. They are correct.But having for the past two years made deficit reduction thecenterpiece of its economic program, the Administration washoist with its own political petard.Bill Clinton’s initlal budget, reflecting his campaign theme,called for increased investment in schools, roads and technology.After it was defeated by one vote he turned on adime; President Invest-in-America became President Cut-the-Deficit. This co-optation of a Republlcan theme was regardedas a stroke of genius by the Washington punditry. Panetta andRivlin were heroes who proved to Wall Street that Clinton wastruly a New Democrat. As late as this past January A1 Gorewas saying on Face the Natron that the budget should be balancedby 2002. Panetta still says he favors eliminating thedeflcit but not by any certain date. Wlth both partles in agree-ment, the publicis now convinced that the deficit is the country’sbiggest economic problem. To make matters worse, theAdministration’s own budget for this year provides for a taxcut and an increase in military spending-despite the fact thatsix years after the end of the cold war the Pentagon is stillspendlng as much in real terms as it did In the mld-1970s. Ineffect, the White House has endorsed putting the burden ofdeficit reduction on social programs.While public sentlment for balancing the budget 1s strong,so is sentiment against balancmg it on the backs of the elderly,the poor, ordlnary taxpayers or state and local governments.So the Republicans will no doubt back off from imposing allthe pain on the mlddle class that balancmg the budget re-quires. “They cannot do this!” Panetta insisted. But the centralobjective of the G.O.P. leadership is not to ellminate thedeficit-any more than it was In the 1980s when Republicansquadrupled the national debt. Deficlt reduction is a cover forthe effort to destroy the government’s abllity to protect Americansagainst the excesses of the market, and to redistributenational resources away from the Democrats’ constituenciestoward the G.O.P.’s own.With help from accommodatlng Democrats, the problemof the deflclt has been blown way out of proportion. As longas annual deficits do not exceed the annual growth in nationalincome, the country can sustain them forever. The only reasondeficits may rise faster than income over the next decadeis the rising cost of medical care, for which the solution iscomprehensive health care reform, not the wholesale slaughterof federal programs. Moreover, the deficit is artificiallyinflated by the pecullar way the government keeps its books.Roughly $140 billion of the current $200 billion deficit representscapital investment, whlch under normal accountingprocedures would not be Included as an operating expendlture.Indeed, the proposed cuts in public investment will domore damage to the next generation than any deficit spendingthe investment represents.rnA REAL ENEMYhe same week that federal bureaucrats from theT Centers for Disease Control were donning protectivesults in Zaire to track and contain the latest outbreakof the killer Ebola virus, budget cutters on CapitolHill were urging slashes in foreign aid programsand C.E.0.s of the two remaining U.S. submarinemanufacturingfirms were wrestling over the $60 blllionWashington will spend on thlrty new attack subs. WhichIS the greater threat to the nation’s secunty-the lethalvirus or the unidentified enemy that these submarinesare designed to blast?Funding for the C.D.C.3 non-AIDS infectious dlseaseprogram has been on the rise in the past few years, butit’s still a modest effort by relative standards at $36 milliona year. Donald Henderson of the Johns HopkinsSchool of Public Health notes that if the United Statesand other developed countries hope to prevent a plagueof Ebola (or another deadly vlrus), they should spend$150 mllllon a year and fund fifteen early-warningcllnlcs near tropical forests and ten state-of-the-artvirology labs In the field.The Ebola scare demonstrates that the United Stateshas an enormous stake in what occurs in the Third WorldCongress eviscerates International env~ronmental, healthand development programs and wastes money on “defense”at our peril. For the prlce of one-tenth of one newsub-or one F-22 Jet fighter, or one C-17 military transportplane, or one B-2 bomber-the United States couldmount a comprehenslve anti-Ebola program. Where’sthe choice?DAVID