PRESIDENT FORD'S PARTING budget is a text to preach from, rather than one to live by. Its authors wrote it in the bittersweet knowledge that other people would be steering the federal government through the fiscal year 1978. This budget has a bit more of a partisan edge to it than most, but there's nothing wrong with that. On the contrary, this book and the Democrat's response will illuminate, for all of us who are not experts and insiders, the great budget choices emerging for the late 1970s.
As he steps out of the White House, Mr. Ford offers the following proposition: If the country holds spending and taxing to the levels set by present law, it will run up a substantial surplus by the end of Jimmy Carter's four years. The reason is that the income tax is progressive, and takes a bigger bite of the taxpayer's income as inflation and a rising economy push him up from one bracket to the next. Why not cut taxes, Mr. Ford asks, instead of letting spending rise? Why not make a determined effort to hold both taxes and expenses to a fixed share of the nation's income?
Since this is the last of eight consecutive Republican budgets, it's not a bad moment to look back to 1969 and the road we have travelled. It is one of the delightful paradoxes of Washington politics that although the Republicans have been in the White House exactly half the time since World War II they keep talking as if they were perpetual outcasts. They have a broad record in fiscal management. But they are habitually reluctant to concede that it has anyjurelevance to their advice for the future.
To judge from the presidential statements of those past eight years, you might think that their record had been a steady decline of spending, except for defense. The reality is, of course, precisely the opposite.
Throughout modern American history the federal budget has slowly and steadily increased in relation to the size of the whole economy. That increase continued and, in fact, accelerated a bit during the past eight years. But with the end of the Vietnam war the defense appropriations fell and, in real terms, only began to rise again this year.
The more interesting patterns is the massive shift within the budget. The money that the federal government spends to buy things, and to pay its employees, has dropped from well over half the budget in 1969 to barely one-third now. Over the same years, there has been a correspondingly huge increase in the personal benefits that the government pay - for pensions, for medical care, for unemployment compensation and all the rest. Nearly half of the federal budget now constitutes a gigantic insurance pool. It protects individual Americans against destitution when they are old or sick or out of work.
This rise of the concept of government as an insurance system has proceeded throughout the Republican years as well as the Democratic. Conceivably you might argue that it demonstrates the power of the Democrats in Congress. More plausibly, it demonstrates a deep and pervasive American response to the uncertainties of life in the kind of society we have built. The future tax levels that people accept as fair and reasonable will depend upon what they get back. Of all the budget issues before the country the greatest is, so to speak, the kind of insurance coverage that we want. That variable, more than any other, will determine the size of the budget that Mr. Carter sends to Congress four years from now.