Making Cents of the Deficit
by Sally Baker

Throughout the budget battle of 1995-96, as President Clinton wrangled with a stubborn Congressional freshman class and federal workers were repeatedly sent on furlough, Assistant Professor of Economics Saranna Robinson Thornton '81 maintained that almost no one was getting the point. Dismayed by media coverage that focused heavily on political winners and losers, on who was compromising and who was not, Thornton urged policymakers--and journalists--to look to the future.
"In about fifteen years, when the baby boomers begin retiring and becoming eligible for Social Security and Medicare, we're going to start having deficits that are going to make today's deficits look insignificant," she said. "It's estimated that in twenty years or less, spending on entitlement programs will be one hundred percent of all revenues. At that point, every dollar of discretionary spending--on things like federal prisons, education, AIDS research, cancer research, national parks--will add to the deficit."
Thornton's conclusions are contained in Bucking the Deficit: Economic Policymaking in America (Westview Press, 1996), which she wrote with Distinguished Presidential Professor of American Government G. Calvin Mackenzie. Written with wit and style in clear, jargon-free prose, the book is for anyone who wants to understand what the country's current budget problems are, where they came from and what could be done about them.
Political expedience is at the root of today's deficit, Thornton and Mackenzie say. Programs created during, especially, the Franklin Roosevelt and Lyndon Johnson administrations evolved from social safety nets for those in need into entitlements for huge numbers of Americans, regardless of need. And politicians who want to be reelected don't threaten those programs.
"What's happened in our country is that politics has so dominated the process that instead of having little deficits when we're in recessions and either balanced budgets or small surpluses when we're in an expansion, we've gotten to a point where people want their programs and they want tax cuts," Thornton said in an interview the week the book was published.
Thornton says the current budget debate is an attempt to "treat the symptoms" of overspending rather than the major, underlying causes. Mostly, she says, the discussions have revolved around changes in discretionary spending, "and when they address entitlement spending it's for the most part the entitlement programs that aren't costing us that much, things like AFDC and food stamps. We're not going to face an enormous budget crisis in fifteen years because of food stamps."
What need to be on the operating table, she says, are massive revenue-eaters like Social Security and Medicare. Given time to prepare, baby boomers could make changes in retirement and health insurance plans to cover themselves in old age, and the entitlement programs could be used solely for those in need. "You pay auto insurance from age sixteen on, and if you don't have an accident you don't say, `I want my premiums back.' I'd like to see Social Security and Medicare turned into true insurance programs," Thornton said.
A government and economics major at Colby, Thornton once planned to go into elective politics, with the U.S. Senate as her ultimate destination. A summer as a Senate Budget Committee staffer adjusted her ambitions, and shortly after graduation she went to work for the Federal Reserve and became interested in monetary policy. "I thought I would go to graduate school for my Ph.D. in economics, then return to the Fed or to another government agency," she said.
But, Thornton says, once she began teaching as a grad-uate student at Carnegie- Mellon University, "that was it. I fell in love with teaching." She returned to Colby in 1989, and Mackenzie, her former academic adviser and a favorite professor, suggested that they be on the lookout for a research topic they could tackle together for publication. Two years ago they began work on Bucking the Deficit, which is part of Westview's "Dilemmas in American Politics" series, edited by Colby Professor Sandy Maisel.
"She did the economics and I did the policy," Mackenzie said. "It was great fun because she's so good. She's exceptionally smart, she always had her parts of the work done on time, and any differences we had over the text we worked out easily. I'd love to do another project like this--if I could find another collaborator as good as Saranna."