A Tax Cut: We can't afford one now

By WARREN RUDMAN

and SAM NUNN

For Scripps Howard News Service

On the day this column is published in your local newspaper, our government will add approximately $700 million to the national debt.

Over the next four years, another $1.1 trillion will be added to the debt by Congress and the president, bringing the grand total close to $6.4 trillion.

In light of these startling facts, how can a big tax cut be responsible? The answer is it can't.

In the current debate over whether or not to delay a tax cut, the wrong questions are being asked. It's not a question of whether American taxpayers want or deserve a tax break.

The real question is can the federal government afford a significant loss of revenue at a time when it is already borrowing trillions of dollars from future generations to finance today's budget deficits? The answer to that question is an emphatic no.

We know for certain that today's favorable demographics will not last much longer. For the next dozen years, the large "Boom" generation will remain in the workforce, while a small "Depression" generation will be retiring. But when the 76 million Baby Boomers become Senior Boomers early in the next century, look out: Official projections show that our annual deficits, driven by Social Security and Medicare spending, will rocket through the stratosphere.

In a recent publication sent to lawmakers in both parties, the nonpartisan Congressional Budget Office warned that our current plan for dealing with this demographic tidal wave "is unsustainable, and attempting to preserve it would severely damage the economy."

Rather than debating whether or not to cut taxes, our politicians in Washington should be preparing right now for this fast approaching challenge by saving and investing more on behalf of young workers.

To make this possible, we should balance the budget by 2002, and even plan to run budget surpluses and begin to retire debt through the first decade of the next century.

Promising voters big tax cuts may sound like good politics, but the long-term result of this policy could be disastrous for all Americans. Let's balance the budget, put our entitlement programs on a sustainable path, and restore our long-term economic growth first.

Then, after we've done the heavy lifting necessary to secure this country's future, we can talk about what will be a well-deserved tax cut, and how to pay for it. If tax changes are made, including fundamental tax reform, the changes should promote savings and be deficit neutral, with tax cuts financed by closing tax loopholes.

Observing Rome in decline, the ancient historian Livy once wrote that its people "could neither stand their ills nor their cures."

At the Concord Coalition, we optimistically insist that this is not true of the American people. While some politicians promise endless free lunches and cynically conclude that voters can no longer bear to face the truth, we are more hopeful.

We believe Americans appreciate the difference between substance and rhetoric and will judge leaders accordingly.

Former Senators Warren Rudman, R-N.H., and Sam Nunn, D-Ga., are co-chairmen of the Concord Coalition in Washington.