Pain Has to Be Added to the Budget Debate
The most striking thing about the continuing federal budget stalemate (calling it a “debate” would be giving it far too much credit) is that few seem to be willing to accept or even state out loud what should be obvious: Eliminating the deficit will impose some pain on most Americans.
At least in the short term, reducing the deficit will eliminate or reduce popular services provided by the government and require that many or most people pay more in taxes. Along the way it will decrease economic growth and jobs compared to what they otherwise would be.
Unless someone invents a way to increase revenues without anyone paying more or to cut spending without any government services being affected, reducing the deficit absolutely is going to hurt individuals, industries and regions. But the budget fight in Washington won’t get any better anytime soon until this becomes understood and, far more important, accepted.
I’m not sure who is more at fault for what has become a chronic disconnect between the actual effect of what needs to be done to deal with the deficit and what’s being said the effect will be.
Members of Congress clearly bear a good deal of the responsibility for not talking about the material effect their preferred spending cuts and revenue increases will have on their constituents. Typical Members and their challengers routinely take the position that someone else’s taxes should go up or spending important to some other industry, Congressional district, state, department or demographic group should bear the burden. In other words, they say it shouldn’t hurt a bit.
Officials also typically talk enthusiastically about deficit reduction alternatives that allegedly will painlessly fix the budget. Eliminating earmarks, giving the president a line item veto, passing a balanced budget amendment to the Constitution and implementing the constantly-suggested-but-never-successful budget process “reform” are always touted as magic elixirs that will cure what ails us without any broken bones, permanent scars or side effects.
This isn’t really surprising: What elected official or candidate for office wants to tell her or his constituents that what they want done on the budget means they’ll have to do with less or pay more? It’s even less likely someone will say that both — get less and pay more — will be needed even when that’s the reality of the situation.
But anyone who says that Congress and the White House are completely to blame for the continuing disconnect on the budget isn’t reading the tea leaves or, in this case, the polls correctly.
Poll after poll on the budget says that the typical American wants the deficit reduced with spending cuts. The response is almost always overwhelming and the source of a few day’s headlines.
But that supposedly definitive result and those headlines change quickly when those same voters in those same polls are asked to specify the spending they want reduced.
That’s when cuts to foreign aid usually become the only ones preferred by a majority. Not only is support for cutting every other federal activity low, but the results typically show that Americans really want more rather than less of almost everything else the government is doing.
In other words, few are willing or think they should have to bear the pain personally. Instead of less government, they really want big government that’s just as big but costs less.
These poll results are the epitome of the “there must be no pain” mentality that typifies today’s budget stalemate. Foreign aid is seen as benefiting someone else in a galaxy far, far away, so reducing it won’t hurt a bit. And unless you live in Houston or along the East Coast of Florida or work for a contractor, that’s also the reason NASA — which actually has programs for galaxies far, far away — is close to foreign aid in unpopularity.
That’s also why any talk about Washington doing less of almost everything else — from Medicare to transportation to education to the Pentagon — spurs angry rallies at town hall meetings and gets multiple lobbyists hired.
It’s also why proposals such as eliminating “waste, fraud and abuse” that supposedly reduce the deficit without imposing any pain because they don’t specify what is actually wasteful, fraudulent and abusive are such perennial favorites. They promise deficit alchemy — the fiscal equivalent of getting rich by turning less precious metal into gold — that’s backed by just as little science.
This year’s budget stalemate made the situation worse than it has ever been, with even more talk about turning deficit reduction into economic gold. For example, until military contractors realized how much the spending cuts triggered by the anything-but-super committee’s failure would hurt, there was little or no mention about the pain caused by reductions in government spending. Indeed, the talk up to then was about how spending could be cut without it having an effect on jobs, income, profits or gross domestic product growth.
There will be no serious deficit reduction effort until this changes — that is, until there’s a dramatically increased recognition that a serious deficit reduction plan is going to be painful. It will also require that anyone who says otherwise lose their credibility.
Without that, the budget stalemate in Washington will continue, and that will hurt.
Stan Collender is a partner at Qorvis Communications and founder of the blog Capital Gains and Games. He is also the author of “The Guide to the Federal Budget.”