Then there is the continuing hurdle of fiscal policy. There is a growing consensus among mainstream economists and business leaders that the debt problem is real but not urgent, that austerity in the short term could lead to a deep recession, akin to Britain now or the United States in 1938. Another relatively modest tranche of deficit reduction, about $1.2 trillion over 10 years, would stabilize our debt-to-gross domestic product ratio at acceptable levels and leave time for constructive reforms in entitlements, the tax structure and other policy areas to achieve robust economic growth in the years ahead that itself would ameliorate any debt issues. But that consensus has entirely eluded the House majority, which is doubling down with a new budget that promises draconian cuts in discretionary domestic spending that would, if enacted, damage areas from food safety to homeland security to research and development and lead to economic upheaval. The sequester alone, if implemented right away, would almost halve projected economic growth in the next year.
Right now, we are headed to a series of mini-confrontations, manufactured games of chicken over debt limit, sequester and shutdowns of government, that could put a crimp in the ability of our political actors to move forward on other issues and could take this encouraging moment on immigration and guns — with the promise of further movement on tax reform, infrastructure development, and a new energy consensus — and send them toward oblivion. So near . . . and yet so far from an amazingly productive policy year.
Norman Ornstein is a resident scholar at the American Enterprise Institute.
Lois Lerner, director of exempt organizations for the IRS, arrives for a House Oversight and Government Reform Committee hearing on the investigation of the IRS' targeting of political groups. Lerner invoked her Fifth Amendment right to not testify and caused a protest from some committee members when she offered an opening statement and engaged in dialogue with members before invoking the right.
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