Note To Deficit Cutters: It Won't Get Easier
The strong domestic economy is providing cover for Washington's amazing ineptitude. The public appears to be taking a time-out from politics to enjoy the fruits of its labor. More people are at work than ever, and many of them are taking home a decent paycheck for the first time in years. But politicians shouldn't bet that this bliss will last forever.
So far, they've been lucky. Take the budget deficit problem. The economy appears to be solving much of it, while the Democrats and Republicans play political games. Thanks to high growth, tax revenues are up, and there is a good chance the deficit will amount to only $95 billion this year, the lowest it has been since 1981. Finding that amount of money to cut in a trillion-dollar budget is not hard, even with a few tax cuts thrown in. But in Washington each budgetary move is being measured by political advantage gained, not money saved.
That's the problem. Washington is playing defense, with the clock running out in 1998 for the next round of congressional elections (followed by the Big One--the Presidential election in 2000). The last election was basically a draw, producing a Democratic President and Republican Congress. Voters may have thought they were signaling the parties to compromise and work together, because they trusted neither to govern. But the parties are hearing none of that. They're just marking time, doing as little as possible on policy while maneuvering for political advantage on the scandal front.
What the politicians forget is that an economically strong period is perhaps the only time that major problems can be tackled. Much work remains to be done on entitlement reform, tax simplification, and of course, balancing the budget. Already, partisan antics that pervade Washington are sowing a deep cynicism toward both parties. People see politicians indulging in vendettas, clever deals, and self-promotion. House Speaker Newt Gingrich is viewed negatively by an astounding 74% of the voting public, according to one poll, worse than Richard Nixon at his darkest hour. President Clinton's polls are falling as well. Once the inevitable slowdown begins, these problems will become that much harder to solve--and voter cynicism will turn to anger.