Red Ink Update: February 26, 1996

Update for February 26, 1996

Since the beginning of the Congressional recess on February 2nd and which ends today, there has scarcely been a word out of Washington about the budgetary impasse. Indeed, the political news has shifted entirely away from the budget toward the contentious and surprising Republican primaries. And given the strange twist taken by that contest, attention may not return to the budget nor deficit reduction. Indeed, the fascination with a balanced budget as the hot topic of the era may have already faded away. The fickle national political mind seems to have found yet another topic of fascination. If so, budgetary compromise is out of the question - we will likely go into the presidential election with effectively no budget at all, balanced or otherwise, for fiscal year 1996.

The possible shift in focus is due to the success of candidate Pat Buchanan, who over the recess beat Senate Majority Leader Bob Dole in the Louisiana, Iowa and New Hampshire Republican primaries (Steve Forbes won Delaware), throwing the race into turmoil. Though Buchanan wants to balance the budget, his campaign platform promotes four planks that have no significant connection to the deficit: (a) generally, the causes of Christian fundamentalists as always , (b) stiff anti-immigration policies, (c) a revival of protectionist trade policies (which would imply a repeal of NAFTA, among other things) and (d) a vague attack upon big business.

Though the moral content of Buchanan's campaign is conservative, the economic component is clearly populist and largely at odds with carefully-crafted image of the Republican Party.

Buchanan won't likely win the Republican nomination, but his likelihood of victory is not the point. He has clearly tapped into a rumbling political sentiment, a discontent with a wide range of sweeping economic issues, coming from a sizeable constituency that cannot be ignored by any candidate. A considerable segment of the conservative voting public worries about job losses, is not sold on "restructuring" and "downsizing" nor the competitive gain that is supposed to arise from both, believes that "free trade" gives jobs away to foreigners, and would probably just as soon see the social safety net that protects them (which would include Medicare, Social Security and farm subsidies but not welfare) kept in place largely unaltered. A balanced budget is low on the list of populist priorities.

If the zeal for a balanced budget has clearly fallen from vogue - if the public really doesn't care now that it has become apparent that there are more profound economic issues to worry about - then how much political energy will be wasted in continuing to fight the fierce, bitter and exhausting partisan budget battles waged over the last year? Certainly Bill Clinton has no reason to budge much from his current position. Any failure to reach resolution can now be blamed on the Republican shipwreck, even if Bob Dole's campaign is eventually salvaged.

There is though one major item of business that must be concluded over the next couple of weeks - the debt ceiling must be raised (see notes below).

Return to Red Ink Update Page, the Departmental Home Page , or the HMC Home Page.