"Ignore The Whining: Obama’s Path To Deficit Reduction Is The Right One"
Our guest blogger is Michael Linden, Associate Director of Tax and Budget Policy at the Center for American Progress Action Fund.
That whining sound you’ve been hearing today is the traditional mating call of the Deficit Hawk. Every year, right around early February, you can hear them as they fly from media outlet to media outlet complaining how, in terms of deficit reduction, the President’s new budget isn’t good enough.
Sen. Kent Conrad (D-ND), for example, moaned that we need, “a much more robust package of deficit and debt reduction over the medium and long term.” Alice Rivlin, a member of the now-completed Deficit Commission, pouted, “I would have preferred to see the administration get out front on addressing the entitlements and the tax reform that we need to reduce long-run deficits.” And the Committee for a Responsible Federal Budget sent out a press release grumbling that, “this budget does not go nearly far enough.”
Their hearts may be in the right place, but all that rushing about trying to impress each other with their deficit-cutting plumage is leading them to the wrong conclusion. The President’s budget goes exactly as far as it should, showing deficits declining from a high of 10.9 percent of GDP down to 3.2 percent of GDP by 2015. The budget includes more than $2 trillion in deficit reduction, most of which come in the form of spending cuts, and would stabilize the debt as a share of GDP.
True, as Rivlin complained, it doesn’t “get out front” on addressing entitlements or tax reform. But since she herself was a member of not one, but two bipartisan deficit commission, Rivlin should know better than anyone that a comprehensive plan that cuts entitlement spending, raises taxes, and generally goes after everyone’s sacred cows will quickly find itself gathering dust.
f the president had followed her lead, his budget would be just another impossible plan to be mocked, attacked, or ignored. As Center for American Progress Action Fund Vice President for Economic Policy, Michael Ettlinger, put it:
While the impatient purists would like to see plans to solve the nation’s long-term problems right now, trying immediately to completely solve our substantial long-term budget challenges would both make success unlikely and be largely pointless because other presidents and Congresses will have much to say about the budgets of the future.
Instead, the President did exactly the right thing by showing how to meaningfully improve our fiscal situation in the near and medium term, without relying on massive, sure-to-be-unpopular reforms, or hoping for a sudden outbreak of bipartisan comity. His budget is a realistic path to stabilizing the debt-to-GDP ratio within five years, and reducing our deficits to more manageable levels.
Getting broad agreement on how we control rising health care costs, protect and reform Social Security, cut back on defense spending, and raise new revenue is going to take years. We are at the beginning of that process, not the end. We shouldn’t want, nor do we need, the president to offer a comprehensive long-term plan for balancing the budget. What we do need is a way to get some fiscal breathing room, so we have the time it’s going to take to come to a workable agreement. And we shouldn’t wait until a “grand bargain” is struck to start down that path.