Archive for the ‘Budget Politics’ Tag

Solutions That Fit The Problem

President Obama’s explanation of why we got into the budget hole:

At the beginning of the last decade, the year 2000, America had a budget surplus of over $200 billion. (Applause.) By the time I took office, we had a one-year deficit of over $1 trillion and projected deficits of $8 trillion over the next decade. Most of this was the result of not paying for two wars, two tax cuts, and an expensive prescription drug program. On top of that, the effects of the recession put a $3 trillion hole in our budget.

So to review: generalized tax reductions, unfunded wars, economic recession and medicare expansion are the drivers of increased federal debt. And his spending side plan to address the debt issue is to freeze spending except for “national security, Medicare, Medicaid, and Social Security”. All the stuff that didn’t contribute to the problem needs to be cut back.

The freeze proposal contributes to the false belief that runaway government spending is primarily related to some bureaucrat in Interior, Agriculture, Energy, HHS, or HUD successfully talking Congress into spending ever greater amounts of money into their programs. That’s just not what’s happening.

We need to fit solutions to problems or else long term problems just won’t get solved.



The Clinton-Bush Budget Cycle

During the “Progressives and the National Debt” special presentation of the Center for American Progress and The Center on Budget Policy Priorities I thought the largest piece of the puzzle missing from the conversation was the political aspect.

In line with the Paul Krugman’s comments it’s not terribly difficult to find a policy mix which will slowly move America towards a sustainable budget. The elephant in the room is that nobody really knows how to create and particularly sustain the political conditions to make those changes. In fact the real issue seems to be the issue of sustainability. Under the right circumstances it’s proven possible to get politicians of both parties to agree to not make the debt worse or make other agreements to move us in the right direction. But all that does is set up the next set of politicians to raid the budget to achieve their agenda (see the last 8 years).

There were a couple of moments where speakers alluded to this type of dynamic, but without digging into the details or offer much in the way of solutions. So is there is a solution or are we doomed?

The answer is there isn’t a ‘policy’ solution, but I think there is a real life strategy that can be pursued. To be exact there is a set of strategies you need to pursue. A lot of the positive change can come in the way the type of policy changes being proposed by panelists; closing tax loopholes, bringing traditional budget scrutiny to tax expenditures, reforming medicare and social security and improving the productivity of the health care system would all improve the long term budget outlook. Those type of changes would be necessary for long term budget reform, but likely insufficient (again if the last 8 years were any indication).

The additional steps would need to legal and political barriers to budget busting policies. The type of legal barriers to bad policy could come in strengthening the rules we have now. Budget reconciliation, the PayGo rules, and the entitlement rules generally could all be fiddled with to make it harder to increase the deficit.

None of these rule changes would mean much without greater political will, but political will is not static thing. It can be created and strengthened. Right now there really isn’t any group I know of doing anything other then issuing critical reports when Congress increases the deficit. It doesn’t have to be that way.

Budget reform advocates are pretty clearly in the thinktank universe, so questions regarding actually creating even small incentives for good policy are pretty left unanswered. Hopeful advocacy groups will start seeing the links between their issues and the budget and create an new political dynamic where short term and irresponsible budget policies pose a greater political threat.