WASHINGTON (MNI) - It's one indication about the state of the fiscal policy debate in the United States that House Minority Whip Steny Hoyer made some news last month when he repeated his call for a "big deal" to tackle long-term budget deficits.
In a speech to the "Third Way" group in late March, Hoyer said U.S. fiscal policy has adopted a posture that is the opposite of what the country needs, with short-term austerity in place but without the long-term reforms of entitlement programs that will drive future deficits.
"Critical investments that would grow our economy have been slashed and the root problems of our future budget deficits have gone largely unaddressed," Hoyer said.
The second highest ranking House Democrat made his case for an ambitious fiscal accord.
"In my opinion, a big deal is the best way for Congress to achieve a fiscally sustainable outlook that can inject certainty into the economy and help us invest in competitiveness, job growth, and opportunity," he said.
"If we can, in a bipartisan way, reach a comprehensive agreement, it would be the single most effective action we could take to stimulate our economy, give confidence to markets, and ensure that we have the resources to invest in our people. Certain reforms that wouldn't pass on their own could be accepted as part of a broader package where everyone shares the political risks," Hoyer said.
To be sure, Hoyer did not offer a specific proposal or even hint at politically risky compromises. But the mere fact that a high ranking lawmaker even mentioned the idea of a big budget package attracted some attention.
Budget experts agree that the disappearance of the deficit as the subject of high level talks is due to a number of factors: the failure of ambitious bipartisan negotiations over the past three years, the sharp decline in the budget deficit over the past several years, the absence of any specific deadline that would trigger talks, and fast-approaching mid-term elections which are militating against policy compromises.
President Barack Obama and House Speaker John Boehner failed on several occasions between 2011 and 2014 to negotiate a Grand Bargain on fiscal policy and the resulting failures have left both leaders angry at the other and convinced their interlocutor is unable or unwilling to negotiate a fair agreement.
Meanwhile, budget deficits have fallen sharply since their peak of $1.4 trillion in the 2009 fiscal year. They declined to $1.1 trillion in FY2012, $680 billion in FY2013 and are estimated by the Congressional Budget Office to fall to $492 billion in FY2014.
The Committee for a Responsible Federal Budget, a budget watchdog group, has issued a report called "Our Deficit Problems are Far From Solved" and argues forcefully against fiscal complacency.
"Progress has been made and it is extremely encouraging to see that deficits are coming down. Yet, despite the progress made in enacting substantial short-term and temporary deficit reduction, policymakers have done little to combat the pressures of population aging, health care cost-growth, and an outdated tax code that will lead to a rising debt trajectory," it said.
The report added that, "Whether policymakers replace or retain the sequester, a combination of new spending cuts, entitlement reforms, and tax reforms will be needed to help support long-term economic growth and put the debt on a clear downward path relative to the economy."
Bob Bixby, executive director of the Concord Coalition wrote in a recent blog that policymakers need to return to the table on fiscal policy. He said last December's budget accord between Senate Budget Committee Chairman Patty Murray and House Budget Committee Chairman Paul Ryan was a modest agreement that only dealt with the discretionary budget for two years.
The Murray-Ryan deal should be seen as the start, not the finishing point, of bipartisan fiscal talks, Bixby argues.
"A budget deal that merely agrees on 2015 appropriations leaves no plan for dealing with the structural forces driving up future deficits and debt. It leaves no sustainable vision for the future of mandatory spending and revenues. And that, it appears, is where things will stand at least through the 2014 elections," Bixby said.
"Let's hope that one result of the elections will be a mandate to set aside partisan gridlock and get about the vital task of negotiating a fiscal sustainability plan," he added.