GOOD FOR THE Senate. On the budget it put aside posturing and partisanship in favor of common sense. By margins of more than 2 to 1, with majorities of both parties in the affirmative, it adopted a budget for next fiscal year that would ease down the deficit without savaging domestic programs. It would accomplish this by holding the defense buildup more or less in check and modestly increasing taxes.
There are flaws in the plan. The tax increase is smaller and the defense budget larger than the Senate Budget Committee proposed. The Senate was helped in making up the difference by a series of "reestimates." You could be forgiven a raised eyebrow on hearing that word, but by historical standards this budget is pretty straight. The most important of the reestimates have to do with the recent decline in oil prices, which has lowered the inflation rate and the likely cost-of-living increases that will have to be given next year in Social Security and other such benefit programs. The oil price decline should also reduce the Pentagon's fuel costs. Last month, Office of Management and Budget Director James Miller urged the Senate to solve its problem by shifting basic economic and spending assumptions and in effect defining the deficit away. To their credit, the senior members of the Budget Committee moved instead to preserve the integrity of the budget process.
What the Senate has done is break with the president, though the breach can be exaggerated. He comes away with the likely deficit reduced but his reputation as advocate of lower taxes and higher defense undiminished. You could argue if you were of devious enough mind that he has it both ways. In any case, the resolution now goes to the Democratic House, which should find it relatively easy to produce an alternative. The big question will be whether the gun-shy Democrats think they have enough cover to endorse a tax increase. To compensate for the slippage that always occurs, the tax increase ought to be larger than the Senate approved. The Democrats should nerve themselves and vote what's needed.
A budget resolution does not by itself reduce the deficit. As last year made clear, there is no guarantee that, if a resolution passes, Congress will also pass the necessary implementing legislation. There is also the Supreme Court to be heard from; it may shortly take some of the terror out of Gramm-Rudman-Hollings. But House and Senate should now be able to agree on a fiscal plan for next year, and if they do, the process will be pretty far along.
Some will say that the ease with which the Senate passed the budget shows the problem was never as great as the alarmists (among whom we include ourselves) said it was. Neither politically nor in programmatic terms, the argument goes, did it take that much to bring the deficit down. Not so. What kept the deficit rising was a defense buildup without a tax increase to pay for it. This budget both levels out the buildup and raises taxes a little. Those are important policy reversals (the one on defense a continuation of a decision reached last year). That is what we have to thank the Senate for.