|
There are only two problems with the balanced budget agreement: it doesn’t balance the budget, but it makes ordinary citizens think that it does.
OPINIONS ’98
Friday, 11 September 1998
Friday, 25 September 1998
Wednesday, 28 October 1998
The President who wants to ‘save Social Security first’ is robbing the trust fund designed to save Social Security.
|
Balancing Act
By Michael J. Ballway ’02
D
espite the fact that all the commentators, columnists, and Right-Wing Conspirators of Planet Monica are obsessed with Our Leader's unacceptable behavior, there actually are other serious issues facing our country. Although the real die-hard scandalmongers would object to any member of the newsmedia discussing anything which does not involve an Independent Counsel, they will be pleased to note that at least this is an issue on which the President has been lying to us. When Bill Clinton first ran for President in 1992, one of the items on his list of Republican crimes was the skyrocketing Federal deficit and trillion-dollar U.S. debt. The President, who unfortunately did make good on his promises to pursue the formation of a socialist paradise on American soil, unfortunately did little to balance the budget in his first term. Consequently, Republicans won midterm elections in 1994 by making an issue out of Mr. Clinton's liberal spending policies. Unfortunately, the Republican Congress' focus soon shifted to the point where deficit reduction and entitlement reform took a back seat to "real" pressing issues like the flag anti-desecration amendment. All of this was before January 1998. In January, the President and Congress announced that the U.S. would have its first balanced budget in nearly three years. This feat of fiscal fitness was accomplished through a ground-breaking bipartisan agreement, for which President Clinton promptly took all credit. There are only two problems with the balanced budget agreement: It doesn't balance the budget, but it makes ordinary citizens think that it does. A couple of definitions: The deficit is how much money the government spends in a year, minus how much it takes in. The debt is a cumulative figure representing how much money we owe from borrowing. Today, our national debt stands at approximately $5,563,665,203,800 -- that's more than $20,500 per U.S. citizen. Simply balancing the budget won't solve the national debt problem; it will only stop the debt from growing. To retire the debt, we have to run 5.5 trillion dollars' worth of surpluses. On January 29, 1998, in response to President Clinton's and House Speaker Newt Gingrich's so-called deficit-reduction plan, Ernest Hollings, Democratic Senator from South Carolina, had this to say: "We have looted the Social Security Trust Fund with wild abandon; we owe it to the tune of some $631 billion. The unified budget is a fraud. It allows Congress to spend money but get credit for not spending money. Only here do fiscally irresponsible people get a good government award." The Senator, a long-time budget hawk, clearly understands that the U.S. budget is divided into two parts, each with separate taxing and spending system. If you can understand this concept, and publicly explain that you understand it, you're either better educated or more honest than the majority of the people in Congress. The main portion of the budget, called "on-budget," takes in most taxes levied by the Federal government and spends that money (actually, spends more than that money, hence the deficit) on Executive Department expenses: Welfare, Defense, Federal grants, space exploration, infrastructure, etc. The on-budget will run a deficit to the tune of $92 billion dollars in Fiscal Year 1998, which ends at the end of this month -- despite the President's budget "surplus." The other side of the equation is called "off-budget" and includes, for the most part, the Social Security Trust Fund and some other trust funds. These funds only raise money, holding it in savings to shore up government aging and medicine programs. The off-budget has in the neighborhood of a $100 billion dollar surplus this fiscal year, but the government is not allowed to spend this money (because it's in trust funds). When Senator Hollings denounces the "unified budget," he is decrying the government's practice of counting on-budget and off-budget together, creating on paper an $8 billion surplus in FY 1998, when in fact we are running a $92 billion deficit. What the government's accountants do, essentially, is group saving and spending money together. While it looks like the President who wants to "save Social Security first" is robbing the trust fund designed to save Social Security, that's not the whole story: Because we can't spend the money in our savings, we borrow it from the trust fund, a loan on which we pay interest -- and which adds to the national debt. T
he bottom line is that the President and Congress have cooked the numbers to make it appear as though we have a balanced budget, when in fact we do not. The money that they say we're using to balance the budget is in a savings trust and is untouchable. The national debt grows more than $371 million a day -- hardly the mark of a "surplus." The fiscal irresponsibility that President Clinton and the Republican Congress set out to fix in 1992 and 1994 has not only continued but expanded, and America has been fooled by their lies of a false surplus. A slightly shorter version of this article ran in the 25 September 1998 edition of The Crusader, on page 9 (second page of Opinions). |