Friday, August 14, 1998

Where's Perot when you need him?

By WILLIAM McKENZIE

Dallas Morning News

The GOP-led House of Representatives wants to use a substantial part of the $1.6 trillion budget surplus predicted for the next 10 years to cut taxes. Representatives will be making their case for their tax reductions in town hall meetings this month.

President Clinton would invest a big chunk of that potential surplus in financing Social Security's makeover. He has been touring the country and discussing different options.

But where is Ross Perot and all his pie charts? You know, the ones that remind us about the size of the national debt and what it can do to us? Don't we need to talk about that, too?

Our gross national debt now equals about $5 trillion, including obligations owed the Social Security trust fund. More important, says Carol Cox Wait of the Committee for a Responsible Federal Budget, the gross federal debt represents about 69 percent of our gross domestic product.

The ratio has grown sharply during the past two decades. It is 36 percent higher than in 1980. And the current gross debt-to-GDP ratio is triple the ratio for 1974. We don't want that figure to get much higher because a country encounters trouble once its debt outgrows its GDP.

Ms. Wait observes it is odd that we have added so much debt during the last 18 years, a time of peace. Usually, debt piles up during a war. (Gross debt equaled 124 percent of GDP in 1946.)

But we indeed have added substantial debt during the past two, largely peaceful decades. During the 1980s alone, the debt ballooned from about $1 trillion to near $4 trillion. That is when deficit spending rose so sharply under Ronald Reagan's administration.

The spike doesn't mean we are going broke. But the debt should get more attention than it does in Washington's budget debate.

Democrats like Charles Stenholm of Abilene have pressed the issue this year. So have traditional Republican conservatives like Jim Kolbe of Arizona. But too many lawmakers prefer to talk about spending more on programs or cutting taxes.

Along with his interest in revamping Social Security, Clinton proposed about $165 billion in new spending for the next five years in his 1999 budget. And House Budget Committee Chairman John Kasich, R-Ohio, pressed representatives to adopt $100 billion in tax cuts as part of his 1999 budget. (House Speaker Newt Gingrich recently indicated the House may settle on a $70 billion to $80 billion tax cut.)

The spend-more-or-cut-taxes debate has grown more intense because of the $1.6 trillion surplus projected for the next 10 years. Although most of it would come from excesses in the Social Security trust fund, which makes the surplus less real because that trust fund really shouldn't be counted as part of the federal budget, the sight of even a phantom surplus has made many politicians eager to present their options about using the windfall.

Some ideas make sense, too. Social Security needs fixing. And there is a strong case for returning some of a surplus to taxpayers. It is their money, after all.

Still, what about that $5 trillion debt? Are we just going to let it sit there? And allow the next several generations of Americans to live with this monster?

I hope not. The public doesn't appear to want that.

Debt retirement often ranks high in public opinion polls that seek the public's priorities for the budget. And Ms. Wait says participants in the five budget seminars her organization has held across the country this year have said, overwhelmingly, that Congress should pay down the debt.

That doesn't mean retiring all our debt. Just like a corporation, some level of debt is needed to provide services.

But Washington still must do something about our debt problem. We may have cracked deficit spending. But we now should focus on paring down the debt we have run up to finance annual deficits.

One sign of hope is that the nation soon may stop borrowing from the Social Security system, where it has gone regularly and heavily for funds to finance deficit spending since the mid-1980s. Congress could stop borrowing from Social Security trust funds by 2004 if it stays within the five-year budget plan approved last year.

At that point, tax revenue would outstrip expenditures. A true surplus then would arrive, allowing the nation at least to hold steady its debt and to shrink the gross debt-to-GDP ratio.

Still, Congress needs more ideas about the federal debt. Where is Ross with his charts?

William McKenzie is a Dallas Morning News editorial writer and columnist. Readers may write to him at the Dallas Morning News, Communications Center, Dallas, TX 75265.

Knight Ridder/Tribune Services