In 12 troubling months, the federal government's fiscal condition has undergone the worst one-year reversal on record. A federal surplus that was heading into the trillions of dollars has given way to budget deficits as far as the eye can see.
President Bush and the 107th Congress probably couldn't have prevented this. Much of the blame lies with a stubborn recession and new spending on homeland security. But they certainly can prevent the crisis from getting worse. A set of budget protocols that have governed taxing and spending since 1990 -- and have proved spectacularly successful -- expired last Monday. If Congress goes home this fall without renewing them, it will be an appalling political failure and a blow to the nation's prosperity.
It's popular to think that nothing works in Washington, but the 1990 budget rules are terrific evidence to the contrary. They capped annual spending levels and required lawmakers to prove how they would pay for any costly new initiatives. Coupled with a strong economy, they worked. The federal budget deficit started shrinking in 1993 and turned into budget surpluses in 1999. That paved the way for falling interest rates in the private economy and a long, durable economic expansion.
Today these budget protocols are more urgent than ever. Two hugely expensive proposals -- repeal of the federal estate tax and an oversized prescription drug benefit for Medicare -- could muster 51 votes in the Senate, but not the 60 necessary to bust the budget. "If these tools are abandoned now, they guarantee a growing deficit," says Leon Panetta, former House Budget Committee chairman and budget director under President Bill Clinton.
Ironically, it's not congressional spendthrifts who are fighting the rules now. Two Senate Democrats -- Russell Feingold of Wisconsin and Kent Conrad of North Dakota -- joined Republican Pete Domenici of New Mexico in trying to extend them last summer. They were shot down by the White House, which objected to Senate spending priorities, and a group of Senate conservatives who want more tax cuts.
Conrad wants to give the idea a second shot this fall and the White House has signaled that it might go along. Lawmakers owe this one to themselves, to taxpayers and to the future.
-- Star Tribune, Minneapolis
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