You couldn't watch the murky budget negotiations of the past month without a growing sense of bewilderment and dismay. They recall what Lord Palmerston once said of a fine point of European politics: "Only three men have ever understood it. One was Prince Albert, who is dead. The second was a German professor, who became mad. I am the third, and I have forgotten all about it."
The budget process is shrouded in a deep and deliberate obscurity. No one expects you to follow the debate. No one wants you to. Both Congress and the White House want to be seen pursuing the twin -- though opposed -- goals of reducing the deficits while protecting constituents from tax increases or spending cuts. The players instinctively promote confusion and boredom. The negotiations are endless, the compromises complex and the procedures mysterious.
The whole point is to convey the impression that things are being done that, in fact, aren't -- or to conceal genuine changes. Budget packages are splintered into so many small pieces that the details are overwhelming. The sequence of decision-making has so many stages that it's never clear whether today's action affirms or reverses yesterday's. The smog is thickened by accounting gimmicks. In the 1987 budget, the deficit was "cut" $2 billion by delaying the mailing of monthly military paychecks until after the start of fiscal 1988 (Oct. 1).
Congress and the White House have been playing this game for the past month. Theirs has been a triumph of obfuscation, as became clear last week. Yes, there was a rough agreement to cut the 1988 deficit by $30 billion. No, it wasn't final. Yes, it would contain about $11 billion of higher revenues. No, the detailed tax increases haven't been decided. (They'll probably be a hodgepodge of small changes.) Yes, the $23 billion of Gramm-Rudman-Hollings spending cuts were automatically triggered because the compromise didn't meet the Nov. 20 deadline. No, the cuts probably won't last long because they'll be superseded by the negotiated compromise. Got it?
Cutting the budget deficits isn't an economic panacea. But it is important. Big deficits do burden future generations. One of every seven dollars of federal spending now pays interest on the debt; that's almost double the level a decade ago. Government faces a constant temptation to inflate its way out of debt. Big budget deficits -- by increasing Americans' total spending -- also contribute to high U.S. trade deficits.
There's a classic collision between sensible policies and ordinary politics. Decisive action on the budget would represent a critical act of economic diplomacy. It would increase pressure on West Germany and Japan to speed up their economies. There would be less of a stimulus from the huge U.S. trade deficits. But no one in Washington wants to act decisively. Congress and the White House have repeatedly avoided a "grand compromise." They prefer to muddle through with a series of tiny and opaque deals. The aim is to disguise, as well as spread, the pain.
In fairness, two things need to be said of this calculated obscurity. First, politicians aren't entirely to blame. The deficits reflect public opinion, which rejects both lower spending and higher taxes. A recent poll by Newsweek found that 77 percent of the public opposes a 10-cent-a-gallon gasoline tax. An NBC-Wall Street Journal poll asked people whether they worried enough about the deficit to pay higher taxes; 59 percent said no. But in other surveys, about 60 percent of the public say government doesn't spend enough on crime, the environment, health care or education. Big deficits are the easiest escape from this impasse, because their effects -- and victims -- are unclear.
Second, this approach isn't entirely a sham. Without tax increases and spending cuts since 1982, the 1987 budget deficit ($148 billion) would have been roughly $200 billion higher. Congress has halted the Reagan defense buildup. Cutting planned spending increases -- with weak constituencies -- was easier than cutting existing programs. Contrary to his public posturing, the president has accepted higher taxes. In 1983 the gasoline tax was raised five cents. Social security taxes have been increased. So have business taxes. The overall tax burden (about 19 percent of gross national product) now exceeds the average for the 1970s.
The problem with muddling through is that it's reaching its limits. The federal budget exceeds $1 trillion. The basic gap between spending and revenues, about 12 percent to 15 percent, can't be finessed forever. The peculiarities of budget accounting mean that the deficit-reduction package keeps the 1988 deficit at about the same level as 1987's. Doing nothing would have resulted in higher deficits. The 1980s have inevitably been an unpleasant period of trying to match our appetites and pocketbooks. For half a century, government grew inexorably. By the late 1970s, spending programs were entrenched while tax burdens were unpopular. President Reagan didn't create these problems, but he's done little to resolve them.
Government can't run on public opinion polls. A president's job is to shape public opinion to see the world as it is, not merely as we would like it. But Reagan quickly disengaged himself from the messy budget choices, and so the conflicts -- and fantasies -- of public opinion remain. Reagan's passivity has been a gift horse to congressional Democrats. It's allowed them the luxury of criticizing his aloofness and spared them the trouble of eliminating wasteful or unneeded government spending. The irony is that, for all the president's stubbornness on taxes, the Congress has been more unyielding on domestic spending.
There's a bipartisan conspiracy of silence. No one wants to talk about clear-cut choices. Everyone prefers to trim all programs a little, preserving the bad and penalizing the good. One perverse result is to magnify in the public mind the severity of needed changes: If no one dares talk about them, they must be awful. Right? Wrong. Some domestic programs should be eliminated, as the administration says. Some taxes should be raised, as critics say. Social security may have to be modified slightly. But a wise combination wouldn't be crushing. The republic can survive without Amtrak. Inaction and silence fan public anxieties.
Therein lies the paradox. The only consensus in Washington today is to delay making the toughest choices. But all the solicitude for public opinion ultimately backfires. It generates public cynicism, because government can't govern. It can't make difficult social choices. That's not obscure at all.