The fast track to a balanced budget

By Howell E. Jackson
February 8, 2012

The state of the union, fiscally speaking, is perilous. Despite record deficits and dire warnings from Europe as to the consequences of sustained fiscal imbalance, our leaders have been unable to find common ground. The Simpson-Bowles Commission in 2010, the Gang of Six last summer and the misnamed Super Committee of this past fall were all bipartisan efforts to cut through the Gordian knot of budgetary gridlock. And all of them failed. Miserably.

Yet despite these failures, Congress now has the opportunity to move us onto a path toward prompt national consensus on fiscal reform. Congressional leaders are this week debating legislation to extend the payroll tax cut. If they are smart, they will include in that bill a small, but important, provision that grants the winner of the 2012 presidential election something called fast-track authority. This authority would allow the president — whoever he is — to submit fiscal reform legislation for an up-or-down vote in both the House and Senate on Jan. 21, 2013, the day after Inauguration Day. Indeed, fast-track authority would be a worthy quid pro quo for members of Congress reluctant to sign off on extending the payroll tax cut without some assurance of future progress on deficit reduction.

What’s promising about this proposal is not just what fast-track authority might deliver in 2013, but what its very existence could do to the presidential race. With fast-track authority granted, President Obama and his Republican challenger could each be expected to put forward during the presidential race a coherent and credible plan to move toward a balanced budget.

Fast-track authority is not unique to budget debates. It has a long history on Capitol Hill, and gives legislation a prompt and clean vote in both chambers. It thus circumvents the Senate filibuster and procedural maneuverings in the House that can block legislation. In the recent past, fast-track authority has facilitated congressional approval of international trade deals and military base closings — public policy challenges where there was agreement that national action was needed but vested interests were using congressional procedures to inhibit progress.

Our public finances present just this kind of problem. Both sides of the aisle agree that we need to return to a path of fiscal balance. But entrenched interests – on both the left and the right – stymie any sort of balanced package of entitlement reforms and revenue enhancements with procedural roadblocks.  The only way forward is to change the rules of the game.

Here’s how fast-track authority could work in the context of a presidential election campaign:

  • Clear expectations: To begin with, Congress should only grant fast-track status to plans that clear specific thresholds of fiscal balance. A workable model could come from the Simpson-Bowles Commission, which targeted an annual deficit beneath a fixed percentage of GDP within five years and a reduction of public debt to sustainable levels over the longer term. Targets for restoring the long-term solvency of Social Security and other entitlement programs could also be defined.
  • Actual deadlines: To make sure that the public would have adequate time to consider competing plans, fast-track legislation should also specify that to be eligible for expedited congressional consideration, a candidate’s proposal would have to be made public by early August, three months before Election Day.
  • Credible numbers: To ensure that the candidates’ plans were, in fact, realistic, Congress should authorize the non-partisan Congressional Budget Office to score each candidate’s plans and release the results of that analysis, as is typically done when members of Congress submit proposed legislation. This safeguard would make sure that the reform proposals are vetted by independent analysts and not simply the wishful thinking of political operatives or economists-for-hire.
  • Public debate: To guarantee that fiscal reform proposals received adequate public attention, at least one presidential debate could be set aside for an informed discussion of the candidates’ fiscal proposals with a panel of expert moderators.

Given the lure of fast-track consideration for qualified proposals, both presidential candidates would be hard-pressed to opt out of offering credible deficit plans. After all, if a candidate squandered an opportunity to get a clean budget bill before both Houses of Congress, how serious could that candidate be about righting our fiscal imbalance?

Presidential candidates are, of course, notoriously skittish about spelling out the details of fiscal reform. Essential components – higher taxes and trimmed entitlements – are seen as political poison, and politicians much prefer to hide behind vacuous homilies on balanced budgets and fiscal restraint than to commit to genuine deficit-reduction measures. But our nation’s fiscal challenges are extraordinary and deserve an honest discussion. And what more appropriate setting is there for that than a presidential election?

9 comments

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“Presidential candidates are, of course, notoriously skittish about spelling out the details of fiscal reform. Essential components – higher taxes and trimmed entitlements – are seen as political poison, and politicians much prefer to hide behind vacuous homilies on balanced budgets and fiscal restraint than to commit to genuine deficit-reduction measures.”

I especially like “vacuous homilies” which sums up ‘candidate speak’ nicely, but somehow said homilies garner the greatest cheers from the vacuous audiences to whom they are given.

When Americans no longer settle for speeches devoid of content, and can understand issues at depth, perhaps there would be no need for a Fast-Track anything from an Executive seat that needs no more power…perhaps Americans would elect capable leaders that care more about the country than the religious or corporate masters they serve and would be willing to destroy the lobbying system and return to representative government of-for-and-by-the-People.

Then you might have chance.

Posted by NobleKin | Report as abusive

“…our nation’s fiscal challenges are extraordinary and deserve an honest discussion.”

Agree completely.

NobleKin hopes that “…Americans would elect capable leaders that care more about the country than the religious or corporate masters they serve and would be willing to destroy the lobbying system and return to representative government of-for-and-by-the-People.”

In your dreams…

But “we, the people” must somehow get beyond the “vacuous homilies” of “candidate speak”.

YES!

Richard Nixon said: “When you’ve got them by the balls, their hearts and minds will follow.”

How do “we, the people” do that? If there were some consensus as to the kind of country Americans want, there are people smart enough to figure out what that would cost. NO CANDIDATE has proposed a “national conversation” on federal priorities. Each has a personal agenda they advocate. As I wrong in believing an election should be NOT about the candidates, but about the COUNTRY?

There is, today, absolutely NO public consensus as to what America should be, or become. “Election issues” are carefully framed such that we each see in them what we want to see. I fear the next national election will be a referendum on extremely few issues of substance.

Going to http://www.usinflationcalculator.com/, I entered 1984 and a $500 dollar amount to compare in 2006. It would take $970.16 in 2006 dollars to buy a “comparable” item, say a car or a house. The latter figure is also a reasonable Social Security benefit amount for 2006. Total inflation over said period was 94%, or, over twenty-three years, just over 4% per year.

Going to http://www.ssa.gov/policy/docs/ssb/v67n3 p73/html, COLAs based on the CPI-E between 1984 and 2006 showed that benefits increased only 15.1 % for individuals who had been beneficiaries for the entire 23-year period. That averages out to a mere two-thirds of one percent per year.

It would thus appear to me that our government has thus allowed our dollar’s value to depreciate some 94% in 23 years while increasing Social Security benefits a mere 15.1%. I guess our country steals from ALL of it’s citizens by inflation, because, as Willie Sutton (bank robber) said: “That’s where the money is”.

If I, as a senior, spend MY time scouring sales and manage to buy groceries for 17% less than the average person of working age, haven’t I EARNED the right to enjoy that savings and spend it as I wish? If jeans, pots, clocks, TVs, etc. cost less today than they used to, there are other things like fresh vegetables, meat, medical expenses and homeowners insurance that cost more.

Instead, unelected bureaucrats and professional economists are employed to come up with ever more ways of “calculating” a “fair” index for Social Security benefits on the apparent presumption that “we, the people cannot be trusted to spend OUR earned benefits as we “should”. WRONG! I know what I spend for what and why. THEY don’t!

In perpetuating the obvious fiction that “our” government knows what’s “best” for us, the sole thing common between these “indexes” is the difference by which each understates the ongoing and apparently intentional erosion of purchasing power of the American dollar over a given period of time. These people cannot be “run out of town on a rail”, tarred and feathered, or lynched as abhorrent examples to others. Due to government unions, they cannot even be fired!

The old “shell game” was one in which a person skilled in diverting the attention of a “mark”, or victim while one pea under three shells was surreptitiously removed or the game otherwise “rigged” so the “mark” did not win. Today’s politicians have mastered this game, whether the subject is Medicare, Social Security, justice from our legal system, fairness from our tax system, effectiveness from our educational system or meaningful accountability by those in charge of any of these.

If we judge by what happens year after year, each exists only increase the size, expense and influence of the fiefdoms each control. None any longer meaningfully represent “we, the people” or even listen to us. WHY do we let THEM frame the questions at every election?

Only after “honest discussion” defines our government’s NECESSARY FUNCTIONS can we price them. Only then can we prioritize them, presuming that when available funds are committed for a given year, we have thus defined out “needs” and the next year’s budget debates then begin. Politicians and bureaucrats will NEVER allow this to happen!

No bureaucrat and no politician on this Earth will ever admit that ANY amount of “government revenue” is ENOUGH any more than a junkie can envision “enough” drugs. Money is the crack cocaine of politics and their “habit” is one that is always growing. There is NO “party of fiscal sanity”.

More and more spending will forever move the mirage of a balanced budget further and further away. All that keeps America afloat is that we continue to have the most productive economy in the world and the least-worst fiscal discipline. For now…

Posted by OneOfTheSheep | Report as abusive

it’s really so easy to me – go back to when we had a balanced budget for 3 years, 1997-2000, and compare what was done to accomplish this to what’s typically proposed now. the 1993 clinton economic recovery act simply returned tax rates to pre reagan levels, before the huge tax breaks for the wealthy and large corporations were given. need i remind you that not one republican voted for this legislation which fostered the best economic growth in 30 years. compare that to the huge tax breaks given by the gop to the wealthy and large corporations, which accomplished nothing except making them richer! trickle down failed miserably, twice, and the current gop bunch has nothing to offer except more of the same failure. 80% of the deficit increases since 1980 have come under the watchful gaze of gop presidents. yet the gop pushes more huge tax breaks for their rich friends over simply returning to pre 1980 tax rates.
oh, and i’d like to ask oneofthesheep to get off his perpetual soapbox and come up with some solutions.

Posted by jcfl | Report as abusive

@jcfl,

Recognizing each “problem” is the first step to any “solution”.

Posted by OneOfTheSheep | Report as abusive

OneOfTheSheep — Recognizing the problem is easy. Politicians can buy votes by lowering taxes (Republicans), or they can buy votes by promising more government benefits (Democrats). Each party’s strategy appeals to their respective supporters. You can only do one without creating a massive deficit (or half of each). But since “compromise” is now a dirtier word than “socialist”, this doesn’t happen. They’d rather just do both to their fullest extent. If you vote them out, the new politicians that replace them will realize they must play the game to stay in office — which is a politician’s only goal in life.

So the real problem is that our political system seems to attract ego maniacal children who believe being “important” is above all else. Being in office is simply a means to that end. So they do whatever they can to stay there. They do not seem to care much about the country.

To add further complications, a large percent of voters seem to believe that “their politician” or “their party” is different and continue to vote for the same people. This greatly hinders any attempts to fix the problem.

So…got any solutions? All of the ones I can think of aren’t exactly constitutional.

Posted by CapitalismSays | Report as abusive

Are you serious?

Giving our government the power to “fast track” tax legislation would put the US on a “fast track” to becoming a 3rd world country!

NONE of these people running the government have shown the slightest fiscal responsibility in their actions, and you want to speed up their fiscal irresponsibility?

What we NEED are more open public debates about fiscal policy, not deals cut behind closed doors that inevitably result in the American middle class being cheated out of our rights to a responsible and responsive government.

Right now our government is SERIOUSLY off-track, or haven’t you looked around you lately at the financial mess we are in because of our leaders?

PseudoTurtle
CPA/MBA

Posted by Gordon2352 | Report as abusive

@CapitalismSays,

I essentially agree with what you say when I say: “There is NO “party of fiscal sanity”.”

@Gordon2352 (Pseudo Turtle),

We do not usually agree, but today sing from the same song book when you say: “NONE of these people running the government have shown the slightest fiscal responsibility in their actions” and “What we NEED are more open public debates about fiscal policy…”.

As to “solutions”, lacking a political “constituency” all I can do is propose. I therefore propose that America needs to have a frank, open and serious “national conversation” on federal spending priorities. Now that America cannot continue to do “everything, whatever it takes”, we must pick and choose priorities; and do so wisely.

I propose “we, the people” in public “question and answer” sessions demand meaningful conversation as to what America should be, or become. Politicians come and go, but we need an America redefined for the immediate future in a manner economically logical and sustainable.

That is NOT, in my opinion, an America that continues to lurch from one debt limit extension to the next. But even if we drag our candidates to this trough, can we make them drink? I’m certainly open to suggestion, because this is a trail not yet blazed or taken.

Posted by OneOfTheSheep | Report as abusive

We were on track to balance the budget and pay off the debt until Dubya decided to cut taxes and start two wars without paying for any of it. Solution? End wars, end tax cuts, get back to the path we were on before the party allegedly of fiscal rectitude decided to open up the candy store.

Posted by borisjimbo | Report as abusive

@borisjimbo…yes, Obama has done a great job of effecting those changes and “closing the candy store” hasn’t he? No, debt and deficits have only ballooned to historical proportions.

Posted by jaham | Report as abusive