August 30, 2014

A Budget Debate Three Stooges Style

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Moe, Larry and Curly are fighting in the back seat of the car. No one is in the driver’s seat. As the boys settle down, Curly looks up and says, “Hey, don’t look now but we’re about to be killed.”

Leave it to The Three Stooges to provide the perfect metaphor for what passes as a budget debate in Washington these days.

It appears that we’re headed for a government shutdown in April and a possible default in May all because politicians can’t stop squabbling over a few billion dollars from a small slice of the budget while our overall fiscal policy is headed for a cliff.

The long-awaited “adult conversation” has not yet begun.

Very few dispute the fact that we’re on an unsustainable fiscal path. Yet too few seem willing to take the mountain of official and unofficial warnings seriously enough to do anything about them.

Indeed, they seem eager to engage in a reckless game of fiscal chicken, virtually daring the other side to do something responsible. We are left with a fierce debate over non-security appropriations that account for only 12 percent of the budget.

That is why even tentative sprouts of reason are worth nurturing. For example, it was heartening to see 64 Senators – 32 Democrats and 32 Republicans – write to the President urging him to engage in a comprehensive approach to deficit reduction using the framework recommended by the bipartisan National Commission on Fiscal Responsibility and Reform chaired by Erskine Bowles and Alan Simpson.

In the House, Blue Dog Democrats, whose votes may be needed to keep the government running this year and to pass a budget resolution for next year, have now weighed in with a similar plea.

These initiatives don’t amount to a solution, nor do they pretend to. They do, however, point the way forward.

The Bowles-Simpson framework and a similar proposal by the Bipartisan Policy Center’s Debt Reduction Task Force chaired by Alice Rivlin, a Democrat, and Pete Domenici, a Republican, showed that people of differing perspectives can reach consensus if they are determined to do so for the common good.

It is exactly this approach that is needed. The President should seize the opportunity by convening a series of comprehensive bipartisan deficit-reduction talks.

Two hurdles must be cleared before conditions for negotiations will be fully ripe.

First, Congress and the President must settle the fight over this year’s appropriations. It has gone on too long over too little. Republicans have already made their presence known by achieving cuts from last year’s appropriations. For them, it is simply a question of when to declare victory and move on to the far more important issues of entitlement and tax reform.

Even if Republicans hold out for the full $61 billion in cuts they are seeking for the current year, they will have done little to hold down projected deficits.

Lasting spending cuts are far more likely to be achieved if Congress and the President focus on the so-called “mandatory” programs (entitlements) that do not go through the annual appropriations process but instead run on autopilot.

These are the programs -- primarily Medicare, Medicaid and Social Security -- which are the main source of future spending growth. Changing the rules for these programs so that they grow at more sustainable rates will be necessary to bring deficits under control. The same can be said for entitlements administered through the tax code, narrowly targeted breaks that are often referred to as “tax expenditures.”

These issues won’t be addressed until debate begins on the Fiscal Year 2012 budget resolution, where the whole budget will be in play. 

The second hurdle to comprehensive negotiations is the absence of any indication from House Members -- beyond the relatively small Blue Dog caucus – that they are committed to broad-based deficit reduction. Are House Republicans willing to consider tax reforms that bring in higher revenues as recommended by the two bipartisan commissions? Are House Democrats willing to consider cost-saving entitlement reforms?

If the answers are no, neither the President nor a majority of the Senate is likely to risk the political heat that comes with tackling entitlement and tax reform.

It’s time to end the back seat brawl. This sort of thing is funny in a Three Stooges sketch, but it is dangerous in real life when so much is at stake.