walton@ametek.UUCP (07/28/86)
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Date: Mon, 7 Jul 86 10:32:33 pdt
From: Steve Walton <ametek!walton@csvax.caltech.edu>
Subject: WSJ's economic policy
The following is a letter which I mailed on Thursday, July 3 to the
Wall Street Journal. I thought Poli-Sci might be interested.
-----Start of text-----
I think it is time to call you to account for your consistent
editorial stance in favor of the Reagan Administration position on the
federal budget: namely, that balancing of the federal budget is
possible solely by removing unnecessary programs, and that said
balance can be achieved while still increasing defense spending and
without enacting new taxes. You have run several editorials recently
which castigate the Congress and various of its members for
maintaining that this is not the case. You are in favor of a
constitutional amendment requiring a balanced budget and giving the
President line-item veto power. You have also severely criticized
Congress for not implementing the recommendations of the Grace
Commission report.
Let us examine some facts. (1) Half of the dollar savings in the
Grace Commission report come from defense, and George Will (the noted
free-spending liberal) concluded after a careful reading that much of
the savings in the report were grossly exaggerated. (2) Every
proposal for a balanced-budget constitutional amendment which I know
of also requires the President to submit a balanced budget to
Congress. This Administration has never submitted a budget to
Congress with a projected deficit smaller than $150 billion, and even
those projections were based on extremely rosy economic projections.
(3) You have criticized such items as the Amtrak subsidy, to which the
President also gave prominent mention in one of his Saturday radio
speeches. Amtrak receives $600 million, 0.06% of the budget and
less than 0.3% of the amount of the deficit. Other specific items
which you have criticized are equally negligible.
In short, you ignore this simple reality: elimination of the
general-funds portion of the federal budget except for defense and
interest on the national debt would be barely sufficient to balance
the President's budgets. Put another way, the budget would not be
balanced if the President vetoed every appropriations bill except
defense sent to him by Congress. Line-item veto power is of very
little utility in such circumstances.
However, I am willing to allow you to prove your case by a simple
challenge: Balance the budget. You are the President of the United
States, and are required by Constitutional amendment to submit a
balanced FY 87 budget to Congress. I suggest the following ground
rules:
* You need not take political feasibility into account. Make
whatever cuts and program deletions you need to.
* You may not increase taxes. You may, however, propose ``user
fees'' such as an increase in airline ticket taxes sufficient to cover
the cost of operation of the FAA, should that prove necessary.
* You may not cut the basic Social Security system, by which I mean
that part which is funded from FICA taxes and is thus balanced within
itself.
* Defense spending should show a minimum of 3% real growth. This
is consistent with your editorial positions.
* You must assume realistic numbers for future economic
performance. I suggest you show your projected surplus for GNP growth
of 2%, 3%, and 4%.
I don't believe that it is possible, but I am willing to be proven
wrong.
-----End of text-----
Pardon the TeX formatting stuff [Removed and slightly reformatted to
be more readable - CWM]. I predict the Journal's response will be, in
decreasing order of probability:
(1) They will ignore the letter. In a month, I plan to send copies to
the NY Times, LA Times, Washington Post, and Chicago Tribune.
(2) They will publish it but ignore the challenge, probably by fudging
with statements like "President Reagan's program was an integrated
whole, and Congress and/or the Federal Reserve strangled economic
growth by not adopting it as a package."
(3) They will actually take up the challenge, thus showing how
draconian such spending cuts would have to be.
I'll keep you posted.
Stephen Walton
ucbvax!sun!megatest!ametek!walton
OR seismo!scgvaxd!group3!ametek!walton
ametek!walton@CSVax.Caltech.Edu
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