Fiscal conservatism

Wow, Republicans sure are good with money.

No Democrats voted for the Republican budget, which sets broad outlines for spending throughout the government.

House Majority Leader John Boehner, an Ohio Republican, addressed conservatives' concerns about deficits saying, "With revenues rising and holding the line on spending we can in fact balance the budget in the next four or five years."

But the House budget forecasts a $348 billion deficit next year and it could be higher since the measure sets aside only $50 billion for the wars in Iraq and Afghanistan, which have been running at about double that cost annually.

With U.S. government debt rapidly escalating, the budget authorizes a $653 billion increase in borrowing authority next year to total $9.62 trillion.

Just for fun, let's look back at the last budget of Bill Clinton's tenure -- you know, the one with the $237 billion surplus.

The dominant feature of the Administration's budget is not the initiatives it contains, but its restraint with regard to the surpluses. The budget proposes to use the lion's share of the surpluses to pay down the national debt and increase national saving for the benefit of future generations, rather than to consume substantial amounts of the surpluses through either large tax cuts or large program expansions.

Why is that important?

We must do all we can to keep the days of deficits in the past. Budget deficits force the Government to borrow money in the private capital markets. That borrowing competes with (1) borrowing by businesses that want to build factories and machines that make workers more productive and raise incomes, and (2) borrowing by families who hope to buy new homes, cars, and other goods. The competition for funds tends to produce higher interest rates.

Deficits increase the Federal debt and, with it, the Government's obligation to pay interest. The more it must pay in interest, the less it has available to spend on education, law enforcement, and other important services, or the more it must collect in taxes-forever after. As recently as 1997, the Government spent over 15 percent of its budget to pay interest, in contrast to a projected 12 percent for 2000. Continuing surplus will reduce these interest payments further in future years.

In the end, the surplus is a decision about our future. We can provide a solid foundation for future generations, just as parents try to do within a family. For a Nation, this means a strong economy and low interest rates and debt. Alternatively, we can generate large deficits and debt for those who come after us.

Maybe that's what Dick Cheney meant when he said "deficits don't matter."