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PASTOR GENERAL'S REPORT, FEBRUARY 10, 1984
PAGE 9
The budget office estimated that the deficit this year would
reach about $190 billion, $6 billion_more than the Administra
tion's current estimate. Then, it said, the deficit would grow
every year until, in 1989, spending reached more than $1.3
trillion and revenue exceeded $1 trillion. That much tax revenue
would be barely enough to pay for the projected cost of Social
Security, Medicare, defense and interest payments. Everything
else would have to be financed J?_y borrowing••••
At the House Banking Committee, meanwhile, Federal
Reserve
Board
Chairman Paul A. Volcker urged Congress to take an immediate "big
bite"--perhaps $50 billion--out of the fiscal 1985 deficit.•..
Volcker warned that deficits are a "clear and present danger"
because they threaten to drive up interest rates and the value of
the dollar, thus hurting U.S. exporters and forcing the nation to
rely on an inflow of foreign capital to finance the deficit.
But why these monumental deficits, year after year? Looking at the chart
which accompanied the above-quoted WALL STREET JOURNAL article, it was
obvious that the string of red-ink years began toward the end of the admin
istration of Lyndon B. Johnson (1964-1968). Mr. Johnson not only stepped
up the costly war in Southeast Asia, he also inaugurated his "Great
Society" social programs. These programs have ballooned since his day, now
totaling, in fiscal 1985, $393 billion (as opposed to $272 billion for
defense).
Moreover, they have a built-in momentum to them; they are
referred to generally as entitlement programs. They are mandated by law.
Spending on them can only be changed by changing their legal status in
Congress. And in an election year, who in Congress is going to cut these
spending programs? Since so much (estimated at upwards of 751) of these
programs are entitled, any president is left with very few areas of the
budget to slice, without a battle with Congress.
Even so, the critics who claim that President Reagan is a merciless scrooge
should look at his "everyman's budget" for fiscal 1985. Nearly every major
category is up, not down. Here is an editorial from the February 2 WALL
STREET JOURNAL.
One measure of President Reagan's fiscal 1985 budget as a
political document can be seen from the applause it is winning
from his fellow Republicans.
No niggardly budget is this.
Republican politicians facing the voters this fall will be able
to point with delight to the spending favors it offers to almost
every segment of American society.
It calls for federal spending to rise 7% more at a time of low
inflation. Proposed outlays for education are up, not down as
the president's defederalization plans once threatened. Agri
culture will get more. Science research will get a generous 151
boost. Medical care will climb 15%, pressing against the magic
100 billion level. Pensioners will have a 4.3% cost-of-1iving
raise ·next January. Soldiers, sailors et al. are promised a 5.5%
pay raise. Defense procurement, the political business end of
the defense budget in that it creates jobs and earnings, will
soar 20% to $77.6 billion••••
So far, the Reagan years have been years of growing government.
When he was elected in 1980, government outlays amounted to 22.4%