Editorial - Time to move to the center

The United States must bring its spending in line with its revenues. At this point, America borrows about 40 percent of what it spends.

That cannot go on for long. National deficits keep growing, financed by foreign investments.

Already, even before Congress really tackles the problem, Standard & Poors, the independent credit rating agency, predicted it would have to lower the Treasury Department’s credit rating. The chances of this happening is reportedly 1-in-3 in the next two years.

The prediction in itself is bad news and could have an important negative impact on the economy and the current recovery. If the nation’s credit rating is actually lowered, that would precipitate a crisis.

The basic problem is that revenues for the Federal government do not come close to matching its spending. The situation is so grave and so out of balance that simply fixing one and not the other will not be enough.

Both revenues and spending need to be addressed.

During the Eisenhower administration, the top Federal income tax rate was 91 percent of income. It was 70 percent during Nixon’s presidency and did not drop to 50 percent until Reagan was president.

It is now under 30 percent and arguments persist that taxes on high incomes should be lowered even further. So much for revenues.

On the spending side, only one president—Clinton— was able to balance the budget and significantly reduce deficits. So much for spending.

At this point, the prospects of coherent spending cuts and revenue increases seem unlikely. Each political party has remedies that focus on one side of the equation but not the other.

Independent commissions and policy groups are calling for both revenue and spending changes to bring the Federal budget in balance, but the political parties are locked in mortal combat, protecting their turf at the expense of the nation’s solvency.

This cannot continue as a political fight. It is instead a fight for survival.

If the political parties will not do it, the American people must come to the center and demand less rhetoric and more serious thought.

Gordon Forgey, Publisher