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FY 2002's First Day

We launched the appropriations season with the luxury of lockboxes. The federal coffers were flush – overflowing in fact – and the years of plenty spread a feast of spending possibilities.  Partisans tussled over prescription drugs and faith-based initiatives, education and missile defense. They dreamed of bridges and libraries and statues for their districts, each bidding for a slice of the surplus.  For a time, it seemed there would be something for everyone.  Until September 11.  “They are not long,” wrote Ernest Dowson, “The days of wine and roses.”

Today marks the first day of the new fiscal year, and the ledger sheet opens to a grim forecast.  We close the books on FY 2001 with a $121 billion surplus, significantly less than the $304 billion projected by the Congressional Budget Office just this spring.  As Washington opens its wallet to answer the attacks, Democrats on the House Budget Committee say that next year’s $2 trillion budget could run between $8 billion and $70 billion in the red.  Projections are inexact as analysts cannot precisely factor the economy’s ability to bounce back or the depth and duration of our anti-terror campaign.

Late last week, GOP leaders in the House pounded out a deal with Senate Democrats to spend $686 billion – significantly more than the $661 billion budget resolution limit, and $7 billion more than Republicans previously supported.  Big ticket items in the upcoming budget include $26 billion in emergency spending, aid to the struggling airline industry, and a soon to be announced stimulus package.  Details on the economic engine starter have yet to be announced, but experts suggest it could weigh in at $100 billion in the form of payroll tax rebates to low-income workers.  The capital gains rate cut proposed prior to Sept. 11 has fallen out of favor.

If the economy continues to decline despite federal efforts to stabilize it, increased welfare and unemployment pay-outs as well as decreased federal revenue from capital gains, payroll and income taxes and corporate profits could further drain reserves.  The surplus is a prediction, not an account already banked

Thus, the case for restraint. In an effort to match the country’s cohesion, legislators have taken pains not to appear contentious, but in so doing have muzzled the usual watchdogs.  The $40 billion emergency relief package passed before either the White House or the Hill had figured out to spend it, and more blank checks await.  Democrat Robert Matsui warns, “We have basically opened the door for anything.  This is the real danger.”  .

As we dig out from terror’s rubble, a degree of new spending is justified.  Defense and security measures, relief and reconstruction rightly headline the budgetary priority list.  But with our fortunes failing, we cannot fund these necessities while financing a surplus-style expansion of other federal programs.  Unfortunately, we’re still trying to have it all. Much as the tug-of-war over the Social Security trust fund grated on the nation’s nerves, it provided a measure of restraint missing since the tragedy.  With the lockbox’s combination cracked, every spending item is suddenly essential to the fight against terrorism, and dissenting votes draw disapproving glares.  Yet those asking budget-busting programs to wait in line – or better still to hold the line – make better sense than their free-spending compatriots.  Until we know the dimensions of this war and the resilience of our economy, Congress must show compassion by means other than an unlimited credit line, for dark though these days may be, this is not time to confuse profligacy with patriotism.

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