March 17, 2013

Gridlock

Okay, so what am I missing here? We have a group of Republicans in the House of Representatives who insist that the current level of federal debt is unsustainable. We have to live within our means. We have to quit borrowing so much money. We have to pay off our debt. Seems simple enough. But this is Washington we are talking about, where nothing is simple and nothing is as it seems.

It's not that these are unreasonable propositions. While the analogy between the federal budget and the household budget is flawed on many levels, it is true that there are basically two things you can do to alleviate debt if you are determined not to borrow any more money: spend less and/or earn more.

Now for most of us, this would not be an either/or choice. We would know we have to cut something out of our budget. And if things were really tight, we would get a second part-time job to get some more cash flow. But that's not what we are hearing out of Washington.

The Republicans say we can only take Door Number One: spend less. Okay, so one more time, let's look at where we spend our federal dollars.


Sixty percent of the budget goes to defense, Social Security, and  Medicare and Medicaid. There is a strong wing within the Republican party that will fight to the death to prevent any major changes in the defense budget. No one wants to tackle Social Security, both parties having passed the buck on that one many times.

As for healthcare reform, the latest Republican budget -- a Paul Ryan rehash of his own budget that was soundly rejected in the last election -- proposes repealing Obamacare, turning Medicaid into a block grant program for the states, and allowing new Medicare beneficiaries the option of buying private insurance with a government voucher or premium-subsidy payment. Anyone see hell freezing over in the latest forecast? Didn't think so.

The Democrats are willing to cut spending, but  their dollar level of spending cuts is lower because they throw in some revenue increases in the form of closing "tax loopholes." A loophole is defined as any tax break given to people or groups you don't like. In this case, most of the tax loopholes targeted by Democrats are aimed at the oil and gas industry and at foreign earnings by domestic corporations. To be fair, Republicans also favor closing tax loopholes, but have been unable thus far to specify which ones would be on the chopping block.

Not to belabor the point, but why should it be either/or? Why can't we cut spending and raise more revenues at the same time? Because the argument is not so much about how much to cut as it is about  what to cut. Both sides have a competing vision of what government should be doing. Each side is using the budget argument to entrench their respective vision of government into future budgets.

If the issue was simply cutting dollars out of the budget, we would have gotten there a long time ago. Independent commissions have produced several perfectly adequate and reasonable plans to achieve this. They are ignored for two fundamental reasons.

First, there is a hard core of congressmen on both sides of the aisle who refuse to compromise on their "principles." We hear mostly about Republicans, but there are plenty of Democrats who are equally adamant about protecting what they see as vital. Some of this is old school stubbornness born out of battles fought long and hard, but lately I see a new twist, the impact of a generation of politicians who drank the Kool-aid of talk radio and actually believed everything they heard.

Second, we have no one person in this country who has the moral authority of say, a Walter Cronkite, someone outside the system who is universally admired and trusted and who can say, "Enough of this bullshit. The American people want you to settle this now. Compromise. Get on with it and get over it."

God, please, yes, just get on with it and get over it. If you say the federal debt is a clear and present danger, then do whatever it takes to solve the problem. Cut spending and raise revenues, and keep doing it until the danger has passed. Any plan will do. Markets thrive on certainty. They don't care how we get there, just that we have agreed on a plan. Bill Clinton got it. So did the Democrats and Republicans then in office. It's about time this generation of politicians got it.


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