Battle Of The Balanced Budget
For the first time in three decades, the budget submitted by the White House for Congressional debate is balanced; in fact, a surplus of nearly $10 billion is projected. Before we all go breathing a collective sigh of relief, however, let's not forget that a balanced budget does not mean that the federal debt has disappeared.
As of January 30, the federal deficit stood at some $5.49 trillion dollars, which means it would take about 550 years' worth of $10 billion surpluses in annual federal budgets to make this monster go away. And that would only happen if the annual surpluses were (a) to continue for the next 550 years, and (b) were used to pay off the public debt.
Although the president's budget NEVER emerges from Congress as it was submitted, and any projected surplus is therefore far from certain, everyone seems to have a great idea about how to spend it. Liberal Democrats want it earmarked for increased social spending, conservative Republicans are looking for tax cuts, and the president is proposing using the surplus to bail out the failing Social Security system.
Meanwhile, the size of the public debt not only does not diminish, it is expected to INCREASE every year to over $6.3 trillion by 2003 (see Table S-15 from the budget).
"Why is all this important?" you ask.
While the Republicans and Democrats are busy trying to nit-pick their special interest provisions into the fiscal 1999 budget, fighting over $50 million here or there, the government is paying well over $240 billion in interest to finance the deficit (See Table S-3.1 from the budget).
While President Clinton touts his budget as freeing up resources that can enrich our society, we continue to dump $240 billion every year into paying off the federal debt. Ironically, Clinton's proposal to spend another $900 million over five years to enroll eligible children in Medicaid will receive more attention by the media, the Congress, and the public than the $1.16 trillion (that's with a "t") that will be spent over the same period to service the debt.
The prospect of a tiny $10 billion surplus has given both parties the "freedom" to push their agendas, each claiming they could improve the quality of life of every American if they only had a little more money to spend. Just think what we could accomplish if we weren't spending 3.2% of our gross domestic product-that's 3.2% of everything we produce in this country annually-on interest payments.
Look at a history of federal budgets, from 1789-1996 or take a closer look at actual budget expenditures from fisal years 1995-1997 or a history of the deficit.
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