Newspaper article The Christian Science Monitor

Slicing Up the Surplus

Newspaper article The Christian Science Monitor

Slicing Up the Surplus

Article excerpt

President Reagan's budget director, David Stockman, shocked the nation in the mid-1980s by speaking of $200 billion budget deficits "as far as the eye can see."

Today's presidential candidates are counting on a budget surplus of at least $200 billion "as far as the eye can see" - or further.

Are their campaign promises realistic? Will they fit into a 10- year budget surplus projected in July by the Congressional Budget Office (CBO) as $2.17 trillion, after locking up $2.4 trillion in the Social Security Trust Fund?

Let's have a look.

George W. Bush wants to use $1.3 trillion of the surplus for tax cuts instead of debt reduction. This will increase interest costs on the national debt by an additional $300 billion.

His extra spending plans add up to $425 billion, calculates the conservative National Taxpayers Union (NTU) in Washington.

This estimate assumes that as president, Mr. Bush could come up with $17.6 billion a year in savings through "government reform" - a neat trick if it can be done.

Adding up the tax cuts and new outlays, the Bush proposals fall just within the CBO's 10-year surplus - if his savings are made.

Al Gore says his "targeted" tax cuts amount to a more modest $500 billion over the next decade. He also suggests a laundry list of spending proposals that the NTU estimates as costing $2.33 trillion in 10 years - an amount five times larger than proposed by the Texas governor.

As a result, the NTU says, Mr. Gore would create a $161 billion deficit over 10 years with his spending proposals alone.

The spending proposals of the candidates, however, are rather fuzzy. Certainly the Gore campaign sees its spending total as far less than the NTU has estimated.

Economist Alan Auerbach says he hasn't seen a realistic "bottom line" on Gore's extra spending costs.

Perhaps the public, with good reason, doesn't expect much realism in campaign promises in the heat of an election season.

But there are other reasons to wonder about these 10-year projections.

One is that federal revenues have been coming in "like gangbusters," as budget expert Fred Ross says. …

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