A Perot moment

A shaky economy, soaring federal deficits, a mounting debt burden on future generations -- it’s like 1992 all over again. Only it isn’t, at least not politically. Sixteen years ago, maverick presidential candidate H. Ross Perot swept onto the scene promising radical change in Washington. Brandishing dramatic charts and rattling off unsettling statistics, he made a potent political issue out of Washington’s budget-busting habits. His quirks eventually torpedoed his campaign, yet he still attracted That anti-deficit sentiment helped persuade Congress to approve a package of tax hikes that, combined with a growing economy, yielded the first federal budget surpluses in nearly 30 years.

Today, the candidates aren’t even paying lip service to curbing the deficit. This race’s maverick, Republican John McCain, once pledged to balance the budget by the end of his first term. In April, after calling for a temporary end to the federal tax on gasoline, he revised his pledge, saying he’d make federal ends meet by the end of his second term -- a safe stance for a candidate who has said he might quit after four years. There’s nary a mention of “deficit” or “debt” in the issues section of the campaign’s website. Democrat Barack Obama, like Perot, has made change the central theme of his campaign, but he’s not focused on a single topic. Dusting off remarks he made two years ago in the Senate, his website calls the rising cost of the federal debt “a hidden domestic enemy” that lowers spending on infrastructure, education, healthcare and retirement benefits. Yet on the stump, Obama is more likely to talk about the “empathy deficit.”

In fairness, both men’s campaigns have laid out strategies for addressing the budget problems. They’re just not that credible. Economists agree that the rising costs of debt service and entitlements -- particularly retiree benefits and health insurance for the poor -- are at the heart of the problem and that they’ll become completely unmanageable within a few decades if left unchecked. But in the time-honored tradition of presidential campaigns, neither McCain nor Obama has called for curbs on Social Security, Medicare or Medicaid. Instead, they’ve made dubious assertions that healthcare reform would also slow entitlement spending.

Beyond that, McCain has bravely called on Congress to fix the solvency problems in the Social Security trust fund. If it doesn’t, he’s promised to propose a solution of some sort, details to be determined. Obama has argued for increasing Social Security tax revenues by applying the tax to higher salaries; currently, no payroll tax is collected on earnings above $102,000. He has also pledged to roll back President Bush’s tax cuts for wealthy individuals and to raise the tax rate on capital gains. Yet a report last week by the nonpartisan Tax Policy Center estimated that the net effect of Obama’s proposed tax hikes and cuts would cost the U.S. Treasury $2.7 trillion more over 10 years than if the Bush tax cuts all lapsed on schedule and the alternative minimum tax continued expanding. (The center projected that McCain’s proposal would cost the Treasury $3.7 trillion.)

One reason the candidates aren’t playing the belt-tightening card is the public’s anxiety about the economy, which is being dragged down by a moribund housing market, tight credit, runaway fuel and food prices, and increasing unemployment. Another reason is that, by making no effort to offset the cost of the Iraq war, the Bush administration gave lawmakers an excuse not to pay for anything else. What’s a few billion here and there in comparison with trillions of dollars in red ink for the troops? Still, McCain and Obama need to present more cogent plans for controlling the deficit and entitlement spending. Spurring the economy is part of the solution, but neither growth nor tax hikes are sufficient to overcome the long-term fiscal challenge. Perot had a simple maxim that the candidates would be wise to remember: We cannot continue to spend beyond our means.