SPEND THE SURPLUS? WHY NOT GIVE IT BACK?

President Clinton announced this week that the national budget surplus will be more than $1 trillion over the next decade. He took the opportunity to call for paying off the entire $5 trillion national debt over the next 15 years.

At first glance the idea has the kind of surface appeal that debt reduction always has. On closer inspection, however, this should be seen for what it is: a trap for the unwary, a fool's errand.

Let's face some facts. Americans are groaning under tax burdens that are at all-time highs in peacetime American history. For decades we have been told that the reason taxes couldn't be cut is that we had a budget deficit. Now the same foes of reducing the tax burden inform us that we can't have tax relief until we pay down the debt. What the Clinton administration is really saying is that they intend to use the surplus as a blocking mechanism to avoid cutting taxes until, they hope, the political climate becomes more hospitable to their big-spending ways.

Properly understood, the real issue isn't the absolute size of the debt, but rather its relation to the size of the economy. Keep the economy growing robustly, and the debt burden is manageable because, relative to the economy's size, it is shrinking. Seen this way, even a debt of $5 trillion isn't a problem as long as we have a growing economy that can service debt at such levels.

Ah, but some pay-off-the-debt zealots insist, you must pay off the debt or else interest rates will skyrocket as government borrowing needs crowd out those of the private sector. Twenty years ago this may have had considerable appeal, even to conservatives. But historical experience conclusively refutes it. Through the 1980s, as the deficit ballooned, a curious thing happened: Interest rates soon fell from lofty, double-digit levels previously unknown, to the single-digits of the last 15 years. That is, we have had the simultaneous occurrence of spectacular economic growth since 1983 -- with only one brief recession -- accompanied by debt levels that seemed high by comparison.

The real fact is that the politicians will spend any surplus. The only way to prevent this unhappy result is for congressional Republicans to push long and hard for across-the-board tax cuts. Happily, GOP congressional leaders appear to be recovering an understanding of this fact. Here's hoping they mean it and that they're in it for the long haul. Washington must give back the surplus in tax cuts to the people whose labor has produced it.