Will Feds Pay The Price of Cuts?

October 22, 1996
THE DAILY FED

Will Feds Pay Price of Cuts?

Every cut has its price, and one scholar says the price of both President Clinton's and Bob Dole's budget plans would be paid for by federal workers.

Brookings Institution fellow Robert D. Reischauer, the former head of the Congressional Budget Office, wrote in a recent Washington Post opinion piece that Dole's plan in particular would require massive cuts in the civilian bureaucracy.

Dole has promised to save $90 billion over six years from a 10 percent across-the-board cut in administrative overhead. But that definition of "overhead," Reischauer argued, includes total spending on all federal activities except defense, interest payments, entitlement programs and capital purchases. It includes, for example, the salary of every federal employee.

"Does the Dole campaign really look upon the paychecks of the VA nurse, federal prison guard, FBI agent, Border Patrol officer, air-traffic controller and park service firefighter as administrative expenses?" Reischauer wrote.

President Clinton's plan to balance the budget by 2002 also relies on some questionable accounting, Reischauer argued. Clinton has placed a good deal of faith in spectrum auctions and asset sales to bring in revenue, sales that result in one-time budget boosts but offer little long-term help.

To have a meaningful debate on federal spending and taxation, Reischauer concluded, "politicians must stop promising a future in which Americans can have it all: lower taxes and all of the services and entitlements they want."

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