Outside editorial: Budget theatrics

Posted: Tuesday, March 08, 2011

The following editorial first appeared in the St. Louis Post-Dispatch:

Cooler heads prevailed as a midnight Friday deadline neared. The government will not shut down this week. Two weeks from now, maybe.

Shutdown or not, our national government has been operating without a budget for more than five months, and nothing in this week’s grudging two-week temporary budget extension suggests that Congress is any nearer to enacting one.

The reprieve was all theater and no substance. Republicans set $4 billion as the price for their cooperation in avoiding a disastrous shutdown, and they accepted 30 percent of it in the form of funding cutbacks suggested by President Barack Obama’s budget proposal. The balance will come from eliminating several dozen special projects branded as earmarks.

Senate Democrats and the White House accepted the deal on Wednesday, giving Republicans bragging rights and perhaps a tactical advantage in the continuing budget battle.

Jockeying for position might be inevitable, but it leaves America trapped, again, by the political preening of our elected leaders. Neither party seems prepared to tackle, at least not in public, what truly matters: the long-term deficit threat of escalating Medicare and Medicaid health care costs and — to a far lesser degree — funding defects in the Social Security program that can be fixed relatively easily.

Instead, the parties offer a theatrical duel over cutting programs that are, in fact, essential to preventing the still-fragile economic recovery from backsliding into recession. These proposals, especially the budget passed by the House Republican majority, may inflict needless pain on the majority of Americans who want their representatives working to create jobs, not posturing about deficits.

On one hand, there’s the Obama administration’s “Winning the Future” proposal. The clumsy slogan embodies the budget’s substantial reductions in some areas and substantial increases in support of education and technological progress. Obama’s budget identifies individual initiative and innovation as keys to America’s future economic security.

On the other hand, there’s the House Republican budget, the unifying principles of which amount to: government bad, taxes really bad, financial regulation bad, environmental protection bad, consumer advocacy bad, lobbyists good, corporations really good, top 1 percent in income and wealth really, really good.

Last week, the Republican approach took a “no confidence” gut punch from a pillar of the high-income, super-wealth establishment: banking giant Goldman Sachs.

Goldman economist Alec Phillips calculated that the House budget would reduce the U.S. gross domestic product by 1.5 to 2 percentage points. GDP shifts of mere tenths of a point are considered significant.

A second hit came early this week when Mark Zandi, the chief economist of Moody’s Analytics, projected that the Republican budget proposal would result in “400,000 fewer jobs created by the end of 2011 and 700,000 fewer jobs by the end of 2012.”

On Wednesday, Federal Reserve Chairman Ben Bernanke told Congress he thought Zandi’s figures were high but acknowledged that the Republican proposal would reduce economic growth and therefore cost “a couple hundred thousand jobs.”

Senate Republicans have been touting a report released Tuesday by the Government Accountability Office. It identifies 34 “federal programs or functional areas where unnecessary duplication, overlap or fragmentation exists” and an additional 47 ways the government might increase tax receipts and reduce costs. The 350-page report doesn’t project how much might be saved, but it offers savings estimates in a few specific areas.

The GAO report might be a useful tool for assessing and possibly eliminating programs that are failing to achieve their intended goals. But what’s also interesting is what the report omits. Nowhere does it mention public broadcasting, national endowments for the arts and humanities, family-planning activities, AmeriCorps, energy-efficiency labeling, product-safety databases or financial industry oversight — all programs conservative House Republicans targeted for elimination.

If ideology and vindictiveness were removed from the process, Republicans and Democrats might make real progress to improve government efficiency — without demonizing some crucial roles government plays in serving the American people.

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