'Boll weevil' economics
If Phil Gramm keeps going like this, he could give the boll weevil a good name. Contrary to the cottonfield pest's destructive reputation, the leader of Congress's 'boll weevils" is constructively offering budget-cutting choices beyond the guns-or-butter dilemma that dominates the news.
The Gramm alternatives are not all in keeping with the approach of the President whose first budget victory owed so much to conservative Democrats boring from within their party and getting the "boll weevil" la bel. The complete price-tagged list is still being prepared. Mr. Gramm sees defense and social services still ripe for some additional cutting. But already the Texas congressman is drawing attention to places the government can pare expenses and subsidies without further disadvantage to the poor or reduced increase in military buildup. He sees such trims adding up to a major contribution toward bringing the 1982 budget back to the originally intended $42.5 billion deficit -- and thus toward lessening business doubts about government determination to stick to a difficult task. And the savings would grow in subsequent years.
How do cuts of $7 billion in '82, $13 billion in '83, and $16 billion in '84 sound? These are the Gramm estimates for holding total government lending to specified previous levels and holding borrowers' breaks on interest within specified limits. Such measures could also aid the economy by reducing government diversion of capital from private would-be investors in a position to create jobs with it.
How about $3.6 billion in '82 and more later? This is the Gramm estimate for having certain government expenses -- inland waterways, airports, Coast Guard navigation aid -- paid for by those who get the benefit of them rather than by all taxpayers.
Put in $4 billion in '82 from a 10 percent across-the-board cut in the budgets of independent agencies (without even including the huge Veterans Administration); $3.2 billion from counting unemployment compensation and extra allowances of workers affected by imports as income for tax purposes (on the theory that those reliant wholly on jobless pay would not reach a taxable level); $2 billion from a $1,750 cap on certain consumer-credit interest deductions (why should interest on a fur coat be deductible? asks Mr. Gramm); $1 .7 billion from having users of second-third-, and fourth-class mail pay for the actual cost of service.
Pretty soon, even these days, it adds up to real money, as Senator Dirksen used to say of a billion here and a billion there in less inflationary times.
Some of Representative Gramm's cuts appear in the realm of "tax expenditures, " the budget term for tax deductions, credits, exemptions, loopholeS, which result in loss of revenue. In chopping away at these the conservative Democrat notes a disagreement with the conservative Republican, Mr. Reagan, to whom he has otherwise given so much support.To Mr. Gramm a subsidy is a subsidy, whether it is a direct payment by government for somebody's benefit or a loss to government for somebody's benefit.
Without presidential support, there may be little hope for the enormous reduction in deficit available through cutting tax expenditures. Such expenditures had been estimated at $266 billion for 1982 even before Congress began adding to the Christmas tree in its taxcutting legislation. But with a leadr like Mr. Gramm bringing up the subject from a conservative point of view, while others continue to bring it up from a liberal point of view, tax expenditures ought to be a prime target in the second round of tax legislation that may be on the horizon.
Republican Senator Dole has said the Reagan administration ought to follow through on a second bill, the promise of which had helped facilitate Senate approval of the first one. He insists that a new bill, however, should offset any tax cuts with equal or additional revenue. Democratic Senator Moynihan had actually introduced legislation to reduce present tax cuts.
An obvious source of additional revenue lies in reducing tax expenditures that in effect require those who are not eligible for them to pay more taxes. Rep. William Coyne (D) of Pennsylvania is among those speaking out for reform of tax expenditures. He calculates, among other things, that $4 billion a year could be brought in with a cap as high as $5,000 on homeowner property tax and mortgage deductions. He is no boll weevil. But you don't have to be one to get in on the act of finding alternatives to be debated as the war against deficits continues.
