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By DANIEL J. MITCHELL
Rappahannock News Contributing Writer
Congressional Budget Office estimates suggest that policymakers will need to put together a $50-60 billion deficit-reduction package next year to meet the Gramm-Rudman-Hollings deficit target for 1990. Most observers expect that there will be a serious effort once again to raise taxes, sparking a heated debate over fiscal policy. Advocates of higher taxes will claim tax increases are needed to reduce the deficit.
It is increasingly clear, however, that higher taxes will be used simply to raise spending. Not only does the historical evidence support this proposition, Gramm-Rudman all but eliminates any possibility that tax increases will be used to lower the budget deficit. Policymakers advocating tax increases, allegedly to reduce the deficit, are actually seeking ways of meeting Gramm-Rudman’s deficit targets without controlling federal spending.
In any given fiscal year, GrammRudman dictates that Congress can spend no more than the projected revenues plus the allowable deficit. Policymakers can use optimistic economic assumptions, budget gimmicks and a $10 billion “margin of error” to increase the amount of money they can spend, but there is still a cap on the overall level of spending.
There are only two ways Congress can increase spending faster than Gramm-Rudman allows: legislators can raise taxes, or they can change the deficit targets. Since al
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