WHEREAS:

The federal budget deficit tinder the Reagan Administration has reached a dangerous level that threatens the future economic well-being of our country. The Reagan deficits have exceeded those of Presidents Truman, Eisenhower, Kennedy, Johnson, Nixon, Ford and Carter combined; and

WHEREAS:

The budget deficits are expected to continue to grow, from $192 billion in Fiscal Year 1985 to $248 billion in Fiscal Year 1989; and

WHEREAS:

Federal deficits are not good or bad in and of themselves. During recession, deficit spending is helping, assisting the recovery. The unusually large and growing size of the current federal deficit, coming during a period of recovery, is of grave concern however. It encourages the Federal Reserve to react by restricting the growth in the money supply, forcing the federal government to compete with private borrowers, driving up interest rates and possibly aborting the recovery. In addition, deficit induced high interest rates drive up the value of the dollar and damage the competitiveness of America's industries; and

WHEREAS:

The huge deficits have been caused by the Reagan Administration's unprecedented boost in military spending and its steep tax reductions. Together, these policy changes over the four year term will account for 82 percent of the federal deficit in Fiscal Year 1985; and

WHEREAS:

The deficits caused by the Reagan Administration's tax and military policies will also require higher interest payments on the rapidly growing federal debt. Interest costs are estimated to be $17 billion higher in Fiscal Year 1985 and a staggering $88 billion higher by Fiscal Year 1988 due to Reagan's policies; and

WHEREAS:

If Reagan's tax and spending policies had not been enacted, the federal deficit would shrink over time instead of grow. By Fiscal Year 1989, the federal budget would post a surplus of $11 billion instead of a deficit of $248 billion — even though spending for government programs other than defense would be $122 billion higher; and

WHEREAS:

Federal deficits of this magnitude readily become an excuse for further cuts in vitally needed social programs.

THEREFORE BE IT RESOLVED:

That AFSCME urge Congress to reduce budget deficits by attacking their root source excessive military spending and the failed program of "supply side" tax cuts for the wealthy and for corporations. Deficits should not be used as a justification for even deeper cuts in domestic spending.

SUBMITTED BY:

International Executive Board