I n t h I s c h a p t e r y o u w I l L

L a w m a k e r s D i s c o v e r
T h a t S u r p l u s e s
C a n B e a s V e x i n g a s D e f i c i t s
B
Y
D
AVID
W
ESSEL AND
G
REG
H
ITT
W
ASHINGTON
—It took politicians 15 con-
tentious years to eliminate the biggest
federal budget deficits since World
War II. Now, they are having nearly as
much difficulty deciding what to do with
the roughly $3 trillion in surpluses pro-
jected over the next 10 years.
The sudden emergence of a budget
windfall larger than anticipated just six
months ago is forcing into fast-forward
a longstanding debate over fiscal policy
and the role of government.
On the surface, lawmakers face a
simple multiple-choice question: Should
the surplus be saved, spent, or devoted
to tax cuts? But at its core, the debate
is about profound issues that were
long suppressed by the deficit-reduction
imperative:
How big should government be?
DoAmericans prefer to
pay less in
taxes or have government do more?
How much should younger workers sac-
rifice to support baby-boomer parents
and grandparents in retirement, and how
much should baby-boomers set aside in
advance? How much should government
interfere with the workings of the market
to spread the benefits of today’s pros-
perity? Is paying off debt incurred in the
1980s and 1990s more or less important
than raising spending on education and
health or lowering taxes?
With something less than unanimity,
Republicans make the case for bigger
tax cuts and smaller government. “Re-
publicans believe it’s a matter of principle
to return excess tax money in Wash-
ington to the families and workers who
sent it here,” House Ways and Means
Chairman Bill Archer, a Texas Republi-
can, said on the floor of the House of
Representatives during last week’s tax-
cut debate. “Republicans believe that
Americans have the right to keep more
of what they earn.”
Where Republicans see an over-
taxed populace, however, liberal Democ-
rats in Congress see “unmet needs.”
“The question,” says Rep. Barney
Frank, a Massachusetts Democrat, “is
not whether the surplus should be spent
according to people’s wishes. Of course
it should. The question is whether it
should be spent on private goods or
public goods.” . . .
The public is split, but a new Wall
Street Journal/NBC News poll suggests
that the GOP is having trouble selling
its call for tax cuts. . . . Asked to pick
just one option for using the surplus, 46
percent of the 1,007 respondents opted
for spending on social programs such as
education or a prescription-drug benefit
for Medicare recipients, 22 percent
picked paying down the federal debt, and
only 20 percent picked tax cuts. (The
rest picked defense or didn’t make a
choice.)
“We are not in a period like the
late 1970s when people really despised
government,” says Republican pollster
Robert Teeter, who conducted the poll
with Democrat Peter Hart. “The elec-
torate is saying there are serious le-
gitimate issues that the government
should address, and they are willing to
use some of their money to do it,” Mr.
Teeter adds. . . .
Fed Chairman Greenspan continues
to preach the virtues of debt reduction.
Although he doesn’t admit to as much,
he sees virtue in gridlock. If Congress
and Mr. Clinton can get appropriations
bills enacted this year, but agree on
nothing else, then the surplus will auto-
matically go to reducing the government
debt.
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