The New York Times

February 3, 2002, Sunday, Late Edition - Final

SECTION: Section 4; Page 14; Column 1; Editorial Desk

The Death of Deficits

When President Bush delivered the sobering news last week that his budget would run a deficit, there was nary a squawk of protest. Deficits have returned, but deficit outrage has not. Concerns about war and recession have chased away memories of nearly two decades of Congressional battles over what mixture of taxes and spending was needed to balance the federal ledger.

In recent years, in fact, the argument was what to do about surpluses. But now that surpluses have disappeared, Democrats are afraid to talk about raising taxes, and the administration seems afraid to cut spending. They are acting as if the prospect of big deficits does not matter. In the short run, they're right -- deficits do not matter. That is a message to keep in mind as Mr. Bush presents his $2 trillion federal budget on Monday. A slumping economy is no time to worry about balancing the budget. Neither should the fear of deficit spending stand in the way of the need to combat terrorism abroad and protect against terrorist attacks at home. But it is unsettling that Mr. Bush shows no signs of acknowledging the longterm importance of avoiding another era of endless red ink. It is also disturbing that no one else in Washington seems prepared to talk about the tough choices that the current budget policies portend.

The role of the federal deficit has long been a peculiar feature of American politics. Some Americans have long resented the fact that the government could run in the red while they could not. Republicans have especially made headway with the charge that deficits came from profligate spending by Democrats.

President Clinton made deficit reduction a centerpiece of his first economic program, and he persuaded Congress to raise taxes to accomplish his goal.

Deficits are a remote abstraction when the public has other things to think about, however. Indeed, Mr. Bush plans to increase spending so substantially that a group of conservative Republicans has complained that he has undermined the party's historic commitment to smaller government. According to leaks, Mr. Bush plans the biggest military spending increases since the Reagan era, a doubling of domestic security spending and targeted increases in areas like education, health and child nutrition programs.

In some areas, there will be budget cuts that Congress may reverse, especially if they threaten popular job training or day care programs. But there seems to be little appetite for the ideological warfare over the role of the federal government that characterized budget fights under President Reagan, Mr. Bush's father and Mr. Clinton.

In this comforting atmosphere, however, Congress needs to beware of steps that threaten the country's ability to address deep-seated problems like Medicare and Social Security.

By some calculations, Mr. Bush's budget plans to tap into $1.5 trillion generated by the trust funds of these retirement systems in the next decade. Accelerating and making permanent last year's tax cuts, as Mr. Bush wants, would make that raid even bigger. Draining the funds for other purposes, even to fight terrorism and pay for military spending, would make it much harder to keep Social Security and Medicare solvent for the retiring baby boomers. The nation needs a discussion about that right now.

During the 2000 campaign, Mr. Bush promised to keep these retirement systems in good health. His programs run counter to that pledge. But the Democrats can be faulted for not being brave enough to address the true consequences of the tax cuts. Both Senator Tom Daschle, the majority leader, and Representative Richard Gephardt, the House minority leader, rightly blame the tax cuts for the deficit. But they are not forcing even their own supporters to confront the choice between repealing the cuts and shoring up Social Security and Medicare. Like Mr. Bush, they, too, need to confront these long-termquestions.

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