- The Washington Times - Friday, January 28, 2000


The Congressional Budget Office (CBO) issued a new 10-year budget forecast this week, and the numbers are enough to take your breath away. In calculations comparable to those made last July, the CBO increased the 10-year cumulative surplus projection attributable to Social Security from $1.9 trillion to $2.3 trillion. But even that change paled compared to the rest of the budget. The numbers for cumulative federal budget surpluses unrelated to Social Security nearly doubled, rising from $996 billion forecast in July to $1.918 trillion projected this week.
Even by Washington standards, this is real money, a fact that Democrats have understood for quite some time. Anticipating the revised numbers, leading Democrats, including President Clinton and the two candidates in his party hoping to succeed him, Vice President Al Gore and former Sen. Bill Bradley, have been tripping over one another dashing to the podium to announce yet another spending program.
The convergence of the CBO's new budget projections with the insatiable spending appetite of the Democratic Party demonstrates more than ever how important it is to return a substantial portion of the looming non-Social Security surpluses to taxpayers. It also confirms how important it is for the Republican Party to recapture control of the White House and the federal government. Otherwise, there can be little doubt that the surplus money the CBO projects to flow into Washington during the next decade will be spent. Even Republican-controlled Congresses have demonstrated during the last two years how incapable they are of adhering to the spending restraint to which they and the Democratic White House committed themselves as recently as 1997.
Unfortunately, Washington is unlikely to meet the spending targets that would produce the nearly $2 trillion in non-Social Security surpluses forecast by the CBO this week because of its inability to exercise even a modicum of spending restraint during the last two years in discretionary programs. Those programs account for about one-third of total federal spending. (The other two-thirds of spending goes for interest payments and mandatory programs like Social Security and Medicare.) To meet the spending target set in 1997 for fiscal 2001 discretionary spending, for example, Congress and the White House would have to reduce spending by at least $35 billion from 2000 levels.
Taking this unlikely event into account, the CBO made two other projections for 10-year cumulative non-Social surpluses. If discretionary spending was frozen at 2000 levels for the next decade, the 10-year surplus would still reach $1.858 trillion. And if annual discretionary spending was permitted to rise by the rate of inflation, the 10-year surplus would total $838 billion, according to the CBO.
Realistically, a 10-year nominal freeze on discretionary spending, which funds everything from the national parks system to national defense, would be a Herculean achievement during a period when tax revenues are overflowing in Washington. This argues all the more for the need to adjust the revenue spigot by substantially reducing taxes. Those funds could be unleashed by exercising spending restraint. By making the sort of decisions they had committed themselves to making in 1997, the Congress and the White House can limit increases in discretionary spending to less than half the rate of inflation for the next decade. That would make available cumulative non-Social Security surpluses closer to the $1.858 trillion level (CBO's second projection) than the $838 billion level (CBO's third spending option). And that would be more than enough money to finance substantial tax relief and to pay the transition costs toward a partially privatized Social Security system, whose return would be much higher than the current system. Meanwhile, the $2.3 trillion in Social Security surpluses for the next decade would be sufficient to retire two-thirds of the federal debt held by the public. Only the intent and the will are needed, a fact that makes this year's presidential election all the more important.

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