TICKING DEBT CLOCK

Remember the Balanced Budget Amendment? Many members of Congress not long ago were so certain that, for the good of the nation, federal budgets must not exceed what was contained in the public purse, they were willing to change the U.S. Constitution to make their point. Now with federal red ink flowing by the gallon, balancing the budget next year, the year after or even five years from now doesn’t seem particularly important to them.

War, or potential war, recession, or what feels like maybe a recession, are good enough reasons for members of Congress to put the BBA behind them now as if it were the slightly embarrassing subject of a late-night argument at the local bar. But what of the deficits predicted three or four years from now – or are war and recession expected to linger? Given the expected enormity of the deficit in the 2004 federal budget, the effect of its interest payments on the ability of government to serve in the future, balancing the budget, or at least reducing the debt, becomes once again important.

The projected deficit for the current fiscal year is $304 billion; next year it is expected to reach $307 billion under the president’s newly proposed budget, but only if Congress does not add to spending immediately or through supplemental appropriations and the president’s higher user fees and expected tax windfalls materialize. The cost of a war and prolonged nation-building in Iraq have been accounted for in the president’s budget, but whether that money is sufficient is unknown.

And while the deficits do not establish records once inflation is considered, they come close to the huge amounts of government overspending in the late 1980s and early ’90s and, more importantly, are expected to continue at least through 2008. It was that kind of spending that inspired the movement to pass a balanced-budget amendment. Maine Sens. Olympia Snowe and Susan Collins, both supporters of the BBA, have expressed concerns about the $1.5 trillion, 10-year tax cut that accompanies the president’s budget, which would come after a $1.35 trillion, 10-year cut in 2001. They are correct to focus their attention on the size of the cut and to question whether it will stimulate the economy; they should also be very concerned with the future costs the tax break will impose on all taxpayers, whether or not they received a meaningful tax cut.

The national debt stands at $6.4 trillion; in fiscal year 2002, taxpayers handed over $333 billion to pay the interest on that debt. For a sense of scale, consider that those interest payments equal more than twice what the president is suggesting for tax cuts. For an administration that emphasizes fiscal responsibility, wants to reform Social Security and is committing the nation to new roles internationally, those payments, more than political opposition, may badly limit its agenda or the agenda of its successor.