The National Economic Commission was given the responsibility for making specific, bipartisan recommendations regarding:

methods to reduce the federal budget deficit while promoting economic growth and encouraging saving and capital formation, and

a means of ensuring that the burden of achieving deficit-reduction goals does not undermine economic growth and is not borne disproportionately by any one economic group, social group, region, or State.

Deficit reduction is a relatively short-term objective, in that the goal is to achieve a balanced budget within five years. Promoting economic growth implies a perspective that extends into the 21st Century.

The realities of the political constraints faced by the Commission during the Presidential election and transition period left no serious possibility of carrying out the first responsibility on a bipartisan basis. The Democratic members of the Commission concluded, reluctantly and sadly, that the Republican members' understandable desire to support the new President's plan for achieving deficit reduction precluded any likelihood of bipartisan agreement. The constraints he imposed and his Flexible Freeze plan are plainly and simply inconsistent with ensuring that the burden of deficit reduction does not fall disproportionately on any one economic group, social group, region, or State.

The fact remains, however, that the majority of Commissioners believe that our national savings rate is too low and that continuing large budget deficits and huge, seemingly intractable trade deficits threaten the nation's long-term prospects for strong economic growth. The views in Part II of our Report are directed toward these longer-run concerns.

What is at stake is how we as a nation enter the 21st Century. We can either slouch into the next century, or we can march into it all flags flying. Our future posture will depend upon whether, in Hamilton's term, we get our "political arithmetic" in order in the next five years.

Getting our political arithmetic in order means achieving budget balance by fiscal year 1993 -anything earlier being wishful thinking -- and moving into surpluses thereafter. The surplus goals are readily identifiable; they should be approximately equal to the combined surplus of the Social Security trust funds.

There is no option in the sense of an alternative use for the surpluses. The revenue stream to finance the surplus already exists in the form of payroll taxes that are high enough to put the Social Security system on a "partially funded" basis. If the present practice of using these surpluses to pay for current consumption continues, the pressure to return to a "pay-as-you-go" basis will become irresistible, and the payroll taxes will be returned to a "pay-as-you-go" level.

On the other hand, if we can summon the political will to Save the Surplus, we will transform our economy and secure our future beyond any present expectations.