So far, Washington's budget war resembles nothing more than bad comic opera, with the highlight of the second act coming with the closing of the federal government on Nov. 14. But if both parties were to push the struggle into the 1996 election year, as they threaten, the battle between President Clinton and the GOP could turn from political farce to economic tragedy.
On strictly financial grounds, the two sides are near enough for compromise on a budget that balances seven years out. But on political grounds, there is war. The Republicans have stuffed their temporary-spending and debt-limit-extension bills with extraneous--but politically charged--measures. There is, for example, a death-row rider that limits the ability of convicts to appeal their sentences. Not much to do with budgets and deficits there. Worse, the Republicans haven't even delivered the seven-year balanced-budget plan they promised: 9 of 13 spending bills and the GOP's enormous tax-cut package are hanging fire.
But Clinton is playing the demagogue, too. He's shouting to the elderly about opposing a $7.40-a-month hike in Medicare premiums. It's a masterful performance--but one that will haunt him. The President cut Medicare costs in 1993, proposed cutting them in 1994, and knows that further Medicare savings will be crucial in any budget deal. Those savings now will be harder to sell, thanks to White House rhetoric.
Is there any reason for Americans to care about this political exhibitionism? Yes, if it drags on much longer. Washington hard-liners, from Clinton adviser James Carville to some House GOP freshmen, are hinting that they would be happy to see the budget tussle drag into 1996 and become part of the Presidential election campaign. This would be a terrible setback for the economy. Long-term interest rates are down sharply--on the expectation that Washington will finally end its budget deficits. Postponing the budget deal into next year would shake investors' confidence.
The major players--President Clinton, Speaker Gingrich, Senator Dole--profess to want to balance the budget. They are not far from a deal. It's time for the politicos to start negotiating in earnest. Stop acting, and get off the stage.