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How Important Is A Balanced Budget, Anyway?

Politics of budget fight appear to be changing

WASHINGTON (AllPolitics, March 31) -- Building momentum for a two-track budget process, Treasury Secretary Robert Rubin reiterated the Clinton Administration's willingness to defer its tax cut priorities until after the president and Congress have hammered out a budget deal. Key Republicans have also suggested considering tax cuts separately.

But is the budget issue losing its sizzle? While almost no lawmaker publicly disputes the goal of balancing the budget, there are signs the issue has lost its potency, both among politicians and the public.

Rubin spoke this weekend on NBC's "Meet the Press," saying, "If there are those in Congress who feel, as there clearly are, that we should separate these two out and do a balanced budget first and then do the tax cuts second, we're open to do that." Both the White House and congressional Republicans have their own favored packages of tax cuts, but under Rubin's scenario, they would be considered separately from an overall agreement to eliminate federal red ink by 2002.

That date -- 2002 -- is to some degree arbitrary, arrived at thanks to the persistence of congressional Republicans in the last Congress who pressed President Bill Clinton for a firm commitment to end deficit spending. But the politics of the issue, so strong previously, may be changing.

A year ago, one poll showed 28 percent of Americans felt the budget deficit was the nation's top concern and only 8 percent do now, according to a recent Gallup survey.

Why? For one, deficits have been declining steadily for four years. And warnings that deficits hurt the economy may be less convincing given the continued strength of the economy, now in its seventh year of expansion, while the stock market continues to generate unprecedented highs.

Certainly academic economists aren't beating the balanced budget drum. A survey of economics professors, reported by The Wall Street Journal in March, showed just one in 10 saw balancing the budget as having an impact on economic growth. In February, a National Association of Business Economists survey of its membership put federal deficits and spending as the nation's third most severe problem, behind savings and productivity (their No. 1 concern) and labor force quality and income distribution (No. 2).

"Without any symptoms, it's hard to say that one has an illness," former Congressional Budget Office chief Robert Reischauer told The Associated Press.

Indeed, the politics of balancing the budget have grown murky. Long a GOP priority, Clinton seems to have co-opted the issue, and Republicans may see less benefit in bludgeoning Democrats on budget issues. In fact, they may not be able to any more.

That could cause defections from conservatives, who are loathe to make a deal if it means sacrificing long-sought tax cuts. Meanwhile, absent public pressure, liberals could reassert their belief that added federal spending in education and social programs is key to a strong economy.

The president has said the budget will be his biggest priority when lawmakers come back from their Easter recess.