Lee H. Hamilton
December 5, 2013
Congressional budget negotiators are moving to meet a December 13 deadline to produce, well, something. For weeks, we’ve been told to keep expectations low. There’ll be no “grand bargain,” negotiators say. Commentators believe that even the narrowest agreement will be a signal achievement. So here’s my question: Doesn’t that seem like an awfully low bar to you?
Yes, I know. The atmosphere on Capitol Hill is poisonous. The two parties — even the various factions within the parties — can barely stand to be in a room with each other. Expecting a sizable budget accomplishment from Congress right now is like expecting water from a rock. It would take a miracle.
Yet there are consequences to not producing an agreement capable of clarifying fiscal affairs. Right now, government agencies cannot plan ahead; they can’t consider long-term projects; they have trouble with staffing; they can’t set priorities; they’re forced to fund programs that have outlived their usefulness and cannot fund programs they know are necessary. And that’s just the federal bureaucracy. Contractors and people who depend on federal spending can’t plan, either. Our economy can’t achieve liftoff, and millions of ordinary Americans remain mired by its slow growth. Washington faces tough choices about spending, taxes, and entitlements, and Congress isn’t making them.
Things are not wholly bleak. Republican Paul Ryan of Wisconsin, the lead House negotiator, and Democrat Patty Murray of Washington, who heads up the Senate team, have been working at least to address the sequester. As you’ll recall, this is the draconian set of across-the-board budget cuts put in place in 2011. At first, many agencies were able to defer maintenance, spend money they’d squirreled away, and cut staff by attrition. This next year will be much tougher: agencies are out of easy options, and defense spending faces an immense, $21 billion cut. That will be felt in every congressional district in the country, given how adept the Defense Department has been at spreading its largesse around. Not surprisingly, pressure is coming from both sides of the aisle to ease the impact.
The sequester is a cleaver, cutting good and bad government spending without rhyme or reason. If congressional negotiators can take a smarter approach, that’s all to the good.
But if they’re going to do that, shouldn’t they address the real problems? The country needs gradual deficit reduction that avoids disrupting the economy or harming the vulnerable. It needs reforms to Social Security and Medicare that put them on a solid footing for decades to come.
These are daunting challenges, but Congress’s toolbox is hardly empty. It could limit itemized tax deductions, increase Medicare premiums for the well-to-do, place caps on spending, shave federal employee benefits to bring them in line with the private sector, increase government fees, sell public assets, put more of the wireless spectrum up for bid, increase the Social Security contributions of higher-income earners, change the consumer price index…. There are literally scores of possibilities, none of them easy, but all of them offering adroit negotiators the chance to craft a long-term solution to problems that have beset Capitol Hill for years and held economic growth far below its potential.
By addressing these issues head on, Congress could move beyond the political machinations that have deeply frustrated so many Americans, and play a constructive role in the economy: promoting growth by investment in infrastructure and basic research, providing incentives for entrepreneurship and job creation. It could create a responsible framework for reducing spending as the economy grows. It could reform a tax code that everyone agrees is broken.
At some point, Congress will have to put the federal budget on “a sustainable path for the long term,” in the words of the CBO. So long as it does not, the economic consequences hurt everyone. Congressional leaders seem blissfully unconcerned about this and aim only for low-hanging fruit, but Americans know that Congress can and should do better, and are rightly tired of careening from crisis to crisis. As members of Congress continue to make politically attractive suggestions that don’t come close to achieving a lasting solution, let’s urge them to get real. It’s time for Congress to go big.
Lee Hamilton is Director of the Center on Congress at Indiana University. He was a member of the U.S. House of Representatives for 34 years.