As Congress sits down to reconcile its differences over President Clinton's massive five-year budget plan, some discouraging words are being heard. To some, notably Senator John B. Breaux (D-La.), the task of cutting the deficit by $500 billion over five years seems so large, and the political hurdles so high, that the plan ought to be scaled back to just $400 billion. The Administration is resisting, but others in Congress are likely to see a political benefit in pursuing a less ambitious goal.
That would be a big mistake. The projected $500 billion cut is a common element in both the Senate and House versions of the Administration's February proposal. It was the same $500 billion figure, and not the details of the tax hikes and spending cuts, that helped buoy the stock market and push down long-term interest rates to some of their lowest levels ever. Declining rates alone have provided an estimated $100 billion stimulus to economic growth. Reneging on that overall commitment now could very well jeopardize market confidence in Washington's ability to get control of economic policy. It would also send a signal abroad that a new Democratic President, outfitted with Democratic majorities in both House and Senate, can't govern effectively.
After a successful G-7 summit meeting in Tokyo, in which the U.S. demonstrated its determination to lead the industrialized nations out of a slump, this is no time to be wavering. Of course, it is tempting for politicians, who are being deluged with complaints from constituents about the specifics of the massive bill, to back down a little bit. Naturally, they'd rather avoid some of the more controversial provisions of the plan--such as the energy tax and cuts in Medicare. But $500 billion in deficit reduction ought to be the minimum goal. After all, even with the planned reduction in red ink, the national debt will still climb by some $1.2 billion over four years. Representatives might share that sobering thought with the next lobbyist looking for a break.