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Not the state of the union

Posted: Friday, January 28, 2000

The following editorial appeared in today's Washington Post:

The State of the Union address long ago ceased to be about the union. It's about the presidency - a defense of the sitting administration's achievements, goals and program. That's all the more true in an election year like this, in which the president seeks as validation of his record to have his vice president succeed him.

The program that President Clinton laid out in his final such address Thursday night was familiar. Almost all the main elements have been previously milked for maximum publicity and political effect. Clinton has won the battle of the last two years to have most if not all of the projected Social Security surplus used to pay down debt against that program's future needs instead of to finance the rest of government. Republicans hoping to hold down spending now outdo the Democrats in their zeal for such a result.

The fight is over the size and disposition of the rest of the surplus, the presumed excess over the next 10 years of general revenues over general governmental costs. The administration apparently thinks this will amount to a little less than $1 trillion, roughly the same as the most realistic of three projections made earlier this week by the Congressional Budget Office. The $1 trillion presumes that spending stays on its present course, neither grows nor is cut in real terms.

Clinton would set aside about $400 billion of this to extend somewhat the life of the Medicare trust fund and pay for a new Medicare drug benefit. As with Social Security, the reservation merely puts off the day of reckoning in this program. A drug benefit is warranted, but our instinct is that it should be used to sweeten a more complete restructuring - combination of cost constraint and new revenues - that would do more than paper over Medicare's financial problems for a few more years.

The president would also use in excess of $100 billion for the laudable purpose of reducing the number of lower-income Americans who lack health insurance. He would grant a further $350 billion in tax cuts whose cost would be offset by $100 billion in loophole closing. Given the costs it faces, that's a larger net cut than the government should commit to at this stage, but to the administration's credit the proposed cuts are mostly well designed to contribute to public purposes. Some $70 billion would be used to help fund retirement accounts for lower- and middle-income people particularly; those would help to cushion the effects of any future Social Security benefit cuts. Another $20 billion would be set aside to expand the earned-income tax credit that supplements the wages of the working poor, and $30 billion would be spent on expanding the current child-care credit and making it refundable so that it would be paid to families with incomes too low to have income tax liability. Lesser uses would include middle-class-only relief from the so-called marriage penalty, and an increase in college student aid to the middle class.

Republicans will accuse the president of proposing large spending increases. In fact, he has artfully couched many of these as tax cuts. His is not a bad program, but Clinton talked a fair amount Thursday night about the importance of using the present prosperity to deal with the long-term problems facing the country. As in each of the last several years, he then systematically ducked the largest such problem within the government's responsibility - how to finance the baby boomers' retirement. That problem he bequeaths to whoever wins the election that he now seeks to influence in part by glossing over the problem.



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