European Stars and Stripes (Newspaper) - July 19, 1990, Darmstadt, Hesse                                Part 3 a a.p.3 47.0 its or Unjin by l  ii let a a i it \ a a any. >v.-jrs�3f. J-.7 5. A a Martin Crutsinger the White House mits Liui reality 6kc hit contorted that the Emmett s deficit problems far work than it admitted last january. A a now instead of being the Poliya Cna of budget forecasters the administration wounds More Hie Chicken Little shooting a the sky a fairing Quot a a Quot a in submitting his  to Congress six months agr p resident Bush foresaw a budget deficit absent changes in Law of s i re 5 billion for the Hyscal year that beat most 1. Bush said that figure which was s3-6.5 billion above the required deficit limit for 1991, could be Bandit with a co Flection of spending cuts and a Hodgepodge of Small tax hikes that would meet the Gramm Rudman deficit target of $44 billion for 1991. Now comes the administration s a mid session review of the budget a and the president sees a much More formidable Challenge. Instead of a s100 billion deficit the deficit has ballooned to $168,8 billion a a $231.4 billion if the savings and loan bailout is taken into account what happened in the read world not a whole lot. The Economy that was chugging along at a sub Par growth rate in january has changed Little in the intervene my months. Interest rates have been stuck at their december Levels for most of the year. The Cost of the savings and loan bailout has been what most people feared a horrendous. A a a the congressional budget office and Many private forecasters All had budget estimates in january that were far higher than the administrations however since the president is required in his january budget to meet the Gramm Rudman deficit targets Only on paper not in reality the administration forecast a far different world six months ago it saw economic growth rebounding smartly thus bringing in More tax Revenue. Normally interest rates Rise along with economic growth. But in the administrations world interest rates would drop sharply As growth rebounded. This helps the Bottom line As Well because it reduces the governments borrowing costs on the s3 trillion National debt. And As for the a amp is the administration despite widespread warnings to the contrary Low balled the estimate of How much the government would need to clean up the mess while the whole process May not win a Quot truth in Bud go Ting award it did allow the president to submit a 1991 budget that honoured his Quot read my ii Psi pledge against tax increases. But with the new budget year set to Start oct 1, the administration by Law must take another look at the economic and budget landscape based on actual performance Over the last six months. Bush a new budget estimates had to take into account the reality that economic growth has not picked up that interest rates have not fallen and that spending on the a amp a problem has been horrendous. It May wed have been the fast approaching deadline for the new budget estimate that forced the presidents hand last month and caused his reversal on the tax question. Treasury Secretary Nicholas Brady budget director Richard Darman and Michael Bosl Cin chairman of the presidents Council of economic advisers All dodged the question monday of just How much in new taxes the administration would be willing to accept to close the Sawning budget Gap. They said that Issue would have to e addressed As part of the budget negotiations with Congress. But in addition to offering the Stark numbers the administration seemed to be proposing the outline of a possible agreement monday. The budget document estimated the deficit both with a amp a spending counted against the Gramm Rudman target and not counted while Darman insisted that the administration was not taking a stand on this Issue the administration seemed to be signalling a willingness to support an accounting change that will not counts amp a spending against the Gramm Rudman targets. That would still leave $100 billion in deficit reductions needed to meet the 1991 Granims Rudman limit of $64 billion. A. Boskin said a deficit fix of that magnitude could Well tip the country into a recession. But the administration also warned that anything less than $50 billion to $55 billion in deficit cuts would not be viewed Quot As a credible attack on the budget  thus the administration appeared to signal a willingness to accept a spending and tax package totalling $50 billion to $55 billion at the same time removing a amp a costs from the Gramm Rudman accounting and raising the Gramm Rudman target for 1991 and following years. That Law whose targets were stretched out once before in 1987, now Calls for a balanced budget by 1993. Despite the fact that the budget negotiations have been going nowhere for weeks Darman expressed Hope monday that a Deal could be reached before Congress leaves for its August recess. He said that the negotiators had come perhaps 60 percent to 70 percent of the Way toward striking a Deal. Quot the unfortunate thing is that the last 30 or 40 percent of the Way is All of the hard stuff. That a where the really Tough choices have to be made a Darman said Martin Cut anger has covered economic Lesuea in Washington for the associated press sine 11 84.flora Lewis British must decide their own destiny in Paris a like a summer storm. President Francois Mitterrand save about Werp disc Titus the Nicholas Ridley a outburst against Ger Community like a summer storm Many and the european co might have cleared the air. There s no doubt the British minister for Trade and Industry said what prime minister Thatcher was thinking before he had to resign saturday. The times of London reported a luncheon meeting last Christmas where Thatcher told a distinguished group she Felt nothing Good could Ever come from the germans. When some argued she snapped Quot i m beginning to wonder whether any of you Are still  this was separate from the Chequers seminar where experts listed germans stereotypical character faults but advised the prime minister that strategy required her to a be Nice to the  Ridley had also attacked the european Community saying that Britain might As a Well hand Power Over to Hiller As to its commission. What riled Paris most however was his sniffing that the i rent h were the germans  they weren to assuaged by the times a quotation of an unidentified senior British official saying Quot you should hear what president Francois Mitterrand says about the germans in  the germans Are the Peak of the dispute As they unify. But the underlying Issue is the question of nations. On one Side Western Europe is moving toward an integration that will indeed diminish the Sovereign Power of states and on the other Eastern Europe is shaking Oft a false consolidation leaving All the old National grievances and ambitions to fester. This is a watershed for the nation state idea on the continent of its birth. Everybody knows what nationalism did to Europe Over two centuries. Foreign minister Mark Eyskens of Belgium wrote recently Quot what has to be prevented at All costs in tomorrows Europe is the rekindling of nationalism As the result of a Renaissance of the  yet National identity remains a Force. Thatcher in t the Only european who can to Bear the idea of diluting it. Charles Pasqua of France former Interior minister made a speech about Frances a crisis of identity Quot w hich he called  he was debating a new Law that would deprive children bom in France to immigrant parents of citizenship unless they requested it. But if Only the word a German Ness Quot were substituted for the Way he carried on about Quot French Ness Quot the speech would have provoked the whole of Europe. Its All been lying there just below the surface the conflicting strains Between National Pride and specificity and the undeniable need to merge resources and concert decisions. The idea that democracies because they Are pluralistic Are never belligerent is a conceit Only validated when they include the other. That was Jean Monnet a great insight when he fathered the european communities. Worse than Ridley a tirade was his Jingo version of Britain a european policy. Quot we be always played the balance of Power m Europe a he said. Quot it has always been Britain s role to keep these various Powers balanced and never has it been More necessary than now with Germany so  3 Hie interviewer asked a but suppose we Don l have the balance of Power would the German Economy run Europe a it a t know about the German Economy Ridley said. A a it a the German peo indeed a United Germany will be a third again As populous As Britain France or Italy All More or less equal in the Community until now. But that was the whole Point of Quot building Europe Quot so that National weight  be the prime Factor. Thatcher has never been Able to accept the idea. The Ridley Case took on such sensational dimensions because her tory party has Long been split Between those who dreamed the old balance of Power policy could still be made to work with Britain the balance weight and those who realized it was Long Over the Hill. The irony of her dilemma is that Britain could have had the leadership role in Europe this last decade. Thatcher was the senior government head firm in contrast to the others flab Biness. She could have been mrs. Europe and Helmut Kohl would have acquiesced. She was t interested. She put nostalgia first. Now Britain will move on perhaps with less kicking and screaming because the Ridley Case will have clarified the Lack of Choice. It will have been to the Good if the British government decides it can have a european role if it chooses to be on the team. C new Yore time