State of the (Fiscal) Union

Blog Post
Friday, January 18, 2019

In the latest “Economist Mom” segment on Facing the Future, Diane Lim discusses the partial government shutdown and the state of the nation’s fiscal policies, handing out poor grades to Congress and discussing what President Trump should tell the nation about Washington’s budget problems.

Lim gave Congress a “D” or “F” for its job performance this year.

“The first role in your job is to get your basic job done,” said Lim, a principal at District Economics Group and former chief economist for The Concord Coalition. “They are getting none of their job done right now.”

“I think it’s beyond dysfunction,” said Concord Executive Director Robert L. Bixby, who joined the discussion.

Bixby said that there was a bipartisan budget deal before the shutdown began, and the president blew it up at the last minute. I asked what both of them thought it would take to end the shutdown.

“It is going to take some more obvious discontent from the American public,” Lim said.

“I agree,” said Bixby. “When the public goes sour on this in a big way, I think you will find pressure on both parties to come to the table.”

Up until the first missed paychecks, he said, “it was a little bit of a free ride for the shutdown in terms of its impact, but now people aren’t getting paid and that’s serious stuff.”

Since this is the typical time of year for the State of the Union address, Bixby and Lim shared the values that they would emphasize if giving a State of the Fiscal Union.

“Our basic problem with the federal budget outlook is that we have repeatedly been unwilling to look for ways to balance spending with receipts, and our economy is not an excuse at this moment to have receipts falling short of our spending needs,” said Lim. “What I would call on in terms of the fiscal State of the Union is a serious reconciling of our economic circumstances with our fiscal shortfall.”

“If I were to give a State of the Fiscal Union, I would be one of the few presidents to start off by saying it was bad,” said Bixby.

“I would try to make the link solidly between fiscal responsibility and economic growth,” he said.

Lim and Bixby also shared what they hoped President Trump would ideally say about fiscal policy when he eventually gives his State of the Union.

“I would like some acknowledgement that the budget deficit situation is problematic right now, that it’s too large, and that there’s some plan . . . to raise more revenue and prioritize spending better,” Lim said.

Bixby said: “The most important thing, in a really big picture sense, is acknowledgment of the problem and willingness to negotiate solutions without preconditions.”

Hear more on “Facing the Future.” I host the program each week on WKXL, NHTalkRadio.com (N.H.), and it is also available via podcast. Join me and my guests as we discuss issues relating to national fiscal policy with budget experts, industry leaders, elected officials and candidates for public office. Past broadcasts are available here. You can now subscribe to the podcast on iTunes, Google Play or through RSS.