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Editorials
Friday, February 4, 2000

Spending caps should
be raised cautiously

The issue: Higher projections of budget surpluses have prompted congresssional leaders to consider raising the spending caps set in the 1997 budget agreement.
Our view: The surplus projections can become outdated quickly if the economy weakens.

IT looks as though Congress will abandon the current legal limits on discretionary spending in the face of new and bigger budget surplus projections. But if the limits are off and Congress goes on a spending binge, no one can say whether the projected surpluses will materialize.

The spending caps were set in the 1997 budget agreement between the Republican Congress and President Clinton, on the assumption that they would be needed to balance the budget by 2002. Last year Congress tried to paper over the caps with accounting gimmickry that exempted some items by classifying them as emergencies -- even the census.

Congressional Quarterly reported that to achieve compliance with the spending caps in 2001 would require a 6.5 percent cut from this year's discretionary spending levels. But this would be painful and improbable at any time. It's politically unrealistic when the government has so much money.

One of the main budget hawks, House Budget Committee Chairman John Kasich of Ohio, conceded, "The caps are not very realistic anymore. It kills me to say that, but it's true."

The key is that the Congressional Budget Office has revised its projections upward. The CBO now says that by 2010 the combined surpluses at the Treasury and in Social Security accounts could total as much as $4.23 trillion. This is about $1 trillion more than it had projected just six months ago.

The CBO numbers wiped out the previously projected $17 billion on-budget deficit in 2000, showing instead a surplus of $23 million for this year.

Now Republican leaders are talking about raising the spending caps and spending more on education and health care, as is Clinton. Both Republicans and Democrats are talking about tax cuts. Fiscal restraint is no longer in fashion. But the euphoria may be based on flimsy foundations. The Concord Coalition, a nonpartisan think tank, warned that the CBO projections are "far too speculative to serve as a reliable source of financing for major tax cuts or entitlement expansions."

The "Blue Dog" coalition of fiscally conservative House Democrats warned, "Projected surpluses have improved by nearly $2 trillion in less than two years, and may deteriorate just as quickly."

It seems inevitable that the spending limits will be raised. The question is how much. A measure of prudence would still be in order.

A downturn in the economy, which is certainly possible in view of the length of the current expansion, could quickly make those surplus projects embarrassingly outdated.

House Speaker Dennis Hastert vowed that Republicans "will not use the current surplus as an excuse to go on a government-wide spending spree." Despite that assurance, the danger remains.

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N. Ireland accord is
on brink of collapse

The issue: The Irish Republican Army has refused to disarm according to terms of an agreement to bring peace to Northern Ireland.
Our view: Without IRA disarmament, the peace process is derailed and British rule will be reinstated.

PROTESTANT leaders in Northern Ireland made a major concession last November by agreeing to a power-sharing agreement with Catholics even though the Irish Republican Army had not begun to disarm. However, Protestants made clear that continued participation would be dependent on the destruction of weapons beginning by the end of January. The IRA has ignored the ultimatum, leaving the Protestants no choice but to scrap the much-heralded accord.

Disarmament has been the crucial issue since the agreement was reached on April 10, 1998, Good Friday, to form a Protestant-Catholic government. Voters overwhelmingly approved referendums the next month in both Northern Ireland and the Irish Republic.

However, leaders of the moderate Ulster Unionist Party boycotted a meeting of the newly created national assembly for nominations to the executive cabinet in July. A stalemate followed until November, when Ulster Unionist leader David Trimble finally accepted a compromise: The Sinn Fein party, the IRA's political arm, would be accepted into a four-party coalition cabinet the same day that disarmament negotiations with the IRA would commence.

Hard-line Protestant parties denounced Trimble's actions and now have reason to crow. The IRA apparently has made no move to disarm since the compromise was reached, according to a disarmament commission report delivered Monday to the British and Irish governments. In addition, the IRA has refused to issue a statement accepting the Good Friday accord's terms for total disarmament by May.

Sinn Fein leader Gerry Adams has appealed for an urgent meeting with Trimble, calling the commission report "essentially a progress report" that should be accepted. Adams' interpretation falls far short of what will be needed to head off Trimble's promised resignation as the new cabinet's senior minister and prevent a collapse of the Good Friday accord.

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Published by Liberty Newspapers Limited Partnership

Rupert E. Phillips, CEO

John M. Flanagan, Editor & Publisher

David Shapiro, Managing Editor

Diane Yukihiro Chang, Senior Editor & Editorial Page Editor

Frank Bridgewater & Michael Rovner, Assistant Managing Editors

A.A. Smyser, Contributing Editor