I’m anxiously awaiting the CBO budget and economic outlook report, which will be released later this morning. [UPDATE: here it is.] I’m trying to think optimistically about how the Administration and Congress will confront the newest numbers and do their best to help both outlooks–budget and economic.
Meanwhile, there will be a vote very soon in the Senate on the debt limit, and some amendments to consider that are designed to encourage fiscal discipline. The Concord Coalition put out this issue brief yesterday with the strong message that while these measures are far from perfect and while we would construct them differently (we being unconstrained by politics), we shouldn’t let the perfect be the enemy of the good:
This year…the debt limit vote could be a catalyst for reforms aimed at improving the nation’s fiscal outlook. With public concern growing over the sharp rise in debt, members of Congress have a strong motivation to combine the “must pass” debt limit increase with measures demonstrating a commitment to rein in future deficits.
Three such measures will likely be voted on in the Senate this week. An amendment, offered by Budget Committee Chairman Kent Conrad (D-ND) and Ranking Member Judd Gregg (R-NH), would establish a task force to make recommendations for fiscal sustainability. Another amendment, offered by Majority Leader Harry Reid (D-NV), would enact statutory pay-as-you-go (PAYGO) rules for entitlement expansions and tax cuts. A third measure offered by Senator Jeff Sessions (R-AL), would establish statutory caps on discretionary spending (appropriations)…
We recognize that the three current proposals are not perfect. The Sessions amendment could be improved by adding an enforcement mechanism, such as sequestration to protect against a breech of the spending caps, and by suspending the caps during a recession. The Reid amendment could be improved by eliminating its PAYGO exemptions for the extension of several existing policies. While some of these exemptions are time-limited, including them would still make the task of deficit reduction more difficult. The Conrad-Gregg amendment could be improved by allowing limited, savings-neutral, amendments to the task force recommendations and by requiring public hearings around the country to receive input and improve the transparency of its deliberations. These changes would mirror a similar proposal in the House sponsored by Representatives Jim Cooper (D-TN) and Frank Wolf (R-VA)…
These ideas should not be fodder for partisan bickering, which the public has clearly grown weary of. If differences on the details cannot be resolved before a vote is needed to increase the debt limit, negotiations should not be abandoned. Another short-term increase in the debt limit, while not optimal, would keep the pressure on to reach agreement. Moreover, the upcoming Fiscal Year 2011 budget process offers an opportunity to fine tune whatever flaws might be perceived in the amendments currently before the Senate.
What is most important at this point is having the political will to act. Budget process reforms can encourage, but not guarantee, positive results. Our fiscal problems do not have a partisan origin and they will not have a partisan solution. Compromise will be needed. This is particularly true for a deficit reduction task force. Already, some have suggested that limitations be placed on what the task force may recommend, such as prohibiting tax increases or changes in Social Security. These or similar preconditions would simply enshrine partisan gridlock and undermine the very purpose of the task force.
For our part, we are willing to accept something less than perfect if it will help to move fiscal policy in a more responsible direction. As the debate continues over amendments to the debt limit, we urge others to demonstrate similar flexibility. No one is going to get everything they want. If perfection is the goal, failure will be the result. We literally cannot afford it.
I expect that some fiscal-hawkish senators will still let the perfect be the enemy of the good, claiming to be voting against the amendments that they would have written differently, that they think (or claim to think) do not go far enough. But imperfections aside, we should keep in mind that these three types of measures–caps for annual discretionary spending, PAYGO for new mandatory spending and tax cuts, and a commission for reforms to the existing entitlement and tax systems–are complementary, not competing, proposals, and that if we really want to make progress on reducing the deficit anytime in the next decade as well as sustainably over the longer run, we really need all three and then some.
…Yes, and as the lead editorial in today’s Washington Post suggests, the “then some” (namely, “political will”) is a lot.
And by the way, the Administration’s proposed (non-security discretionary) “spending freeze” reported here by Lori Montgomery is not the big deal that some of the media reaction would suggest. (OK, I had MSNBC on last night…) But more on that later in the context of the new CBO numbers.