Ehrlich on Washington column, July 26, 1998

NEWS FROM Robert L. Ehrlich, Jr. Second Congressional District of Maryland 1 407 York Road, Suite 304 Lutherville, Maryland 21093 3 1 5 Cannon House Office Building Washington, D.C. 20515 EHRLICH ON WASHINGTON Week of July 26, 1 998 By Congressman Robert L. Ehrlich, Jr. THE TRILLION DOLLAR DEBATE In 1995, the United States was running a $200 billion deficit and President Clinton was predicting a string of looming $200 billion-a-year deficits far into the future. Four years of strict fiscal discipline, welfare reform, soaring tax receipts as a result of good economic times, and pro¬ taxpayer policies by Congress have helped achieve a balanced budget, and a sizable surplus, for the first time since 1969. Now, as Congress wrestles with how these surplus monies should be spent, the Congressional Budget Office, the non-partisan agency that analyzes economic and budget projections for Congress, is predicting that this surplus is likely to be larger than expected. CBO is predicting a surplus of $1.6 trillion over the next decade, $1 trillion more than CBO predicted in March. This is an astonishing change in direction in our nation’s fiscal policy since Congress prioritized balancing the budget. Though the recent surplus announcement is definitely good news, it is important to look at it in its proper context. The current balanced budget is illusory. Currently, excess payroll taxes are hiding the true size of the deficit. If excess payroll taxes are excluded from being used for other government programs, the current $63 billion surplus vanishes into a $41 billion deficit. Not until 2002 will the federal budget be balanced without using excess Social Security payroll taxes. Preserving and strengthening the Social Security system is obviously the first and most