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The Fiscal Hawk Dance

November 21st, 2008 . by economistmom

Stan Collender (in his weekly column for Roll Call, posted on Capital Gains and Games) explains it’s not just a crass “chicken dance” he’s talking about…

The reason that careful choreography will be needed is that, instead of the one-act performance with a single highlighted dance that has been typical of the budget decisions of the past, the coming debate will need to look far beyond fiscal 2010, which will start Oct. 1, 2009. Those running the company need to stage a far more difficult multi-act, multi-dance number, where the decisions made this year are part of a longer-term plan with a larger troupe of dancers and a big finale.

The reason for this is actually quite simple: “The budget” won’t be much of a consideration in this year’s debate, but what’s done this year will have a huge impact on the budget debates ahead…

[W]hile deficit reduction may not be immediately appropriate, an ongoing discussion starting this year so that the dance can begin when it again becomes economically viable should not be delayed until everyone agrees we’re at that point. This provides some outstanding opportunities for the Obama administration and the House and Senate Budget committees, all of which will be able to demonstrate their ability to see the big picture and choreograph the steps needed even if they won’t actually be performed on a big stage soon.

When presenting the Obama administration’s first budget early next year, the new director of the Office of Management and Budget [i.e., current CBO director Peter Orszag] should spend almost as much time and effort talking about the years after 2010 than what is recommended for fiscal 2010 itself…

The Budget committees will have a similar opportunity. Instead of just focusing on the next fiscal year, which will be mostly determined by decisions made before the hearings and markups on the 2010 budget are held, the committees should begin to deal with the longer-term challenge by making recommendations about what will need to be done…

That should mean that, while others are trying to do a budget jive or two-step, the OMB director and Budget committees will be choreographing the far more dramatic and difficult deficit and debt pasodoble.

Yep, that’s no “chicken dance”– but a “pasodoble”… What’s that?  Read this, and watch this.  (I always learn so much from Stan!)  I hope that we fiscal hawks can be both that bold and that well-coordinated.

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