Raging Skepticism That We Can Address Deficits

Raging Skepticism That We Can Address Deficits

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My blog post of last week, suggesting that we not dismiss any possibility of deficit-cutting action under President Obama and the next Congress, surely attracted its share of skeptics among my friends and colleagues.

“I have lost all hope,” one of Washington’s preeminent fiscal experts e-mailed me, dismissing my comparisons between, on one hand, the 1980s and ‘90s when presidents and Congress turned huge deficits into a short run of surpluses, and, on the other hand, what the near future may bring. “Hope you’re right, but I doubt it,” a prominent Washington-based blogger on fiscal issues replied in an e-mail. A third skeptic recalled that during the earlier period, we were blessed with Social Security surpluses that the 1983 reforms helped to generate as well as a post-Cold War drawdown in defense.

Well, just to be clear, I wasn’t predicting bipartisan nirvana in the months to come. I was merely suggesting that we not consider legislative gridlock and fiscal failure a foreordained conclusion because “a Republican Party that finds itself in control of both the House and Senate after November could well face public pressure to fulfill its promise to address surging deficits. And the only way to do that is to cooperate with Obama.” I’m as comfortable with that observation today as I was when I drafted it last week.

Nevertheless, I fully acknowledge that the skeptics obtained more ammunition in the days after my post of last week when President Obama announced that he wants to give Social Security recipients a one-time $250 payment because seniors won’t get a cost-of-living adjustment in Social Security next year, and House Speaker Nancy Pelosi promised to schedule a vote on it after Election Day.

I can’t argue with fellow blogger George Hager, who notes that such a payment would cost the federal government nearly $15 billion that it doesn’t have, that Social Security benefits are still outpacing inflation after the 5.8 percent increase that beneficiaries received for 2009 due to soaring energy prices in late 2008 that later retreated,  and that those who vote for the payment should be asked when they plan to get serious about deficits.

Nor can I argue, more broadly, with those who remind me that the chances for bipartisan cooperation on deficit-cutting or anything else seem remote. Yes, partisanship is growing and won’t likely recede in the near future if, as expected, Republicans regain control of the House and at least approach a majority in the Senate. Yes, Republicans almost uniformly vow not to raise taxes, and Democrats are facing enormous pressure from their liberal grass roots not to tinker with Social Security.

I’m not ready to throw in the towel just yet, however. I’m not ready to conclude that only an economic crisis of some kind – a crisis of confidence by our creditors that forces a surge in interest rates, for instance, or a run on the dollar that brings soaring inflation – will produce action to reduce the deficit. Here’s why:

First, the prospects of soaring red ink do not constitute the biggest challenge that this nation has ever faced.

We have overcome a civil war, we have prevailed in two world wars, we won a “cold war,” and we managed to revive our economy not only after the economic collapse of the 1930s but also several of a century earlier. Our leaders during those periods rose to the challenge before them, and they were no smarter than their counterparts of today nor, based on my reading of history, any less political.

Second, the Washington of the 1980s and ’90 may be different than today’s, but let’s step back for a moment.

A period of 20 to 30 years (the time between the earlier era and today) is a mere blink of an eye in historical terms. Politics can change – quickly. History does not move in a straight line. It ebbs and flows. None of us knows what the future will bring, and many have looked foolish by extrapolating from then-current circumstances.

Third and finally, those who are convinced that the nation’s leaders will not act in the absence of crisis are saying something profound about our political system – that, due to the breakdown of the political parties, or the influence of single-issue money and groups, or the angry chatter on the cable shows and the web, or the brains or motives or short-term focus of our leaders, we have lost the capacity to act.

I disagree. Again, I am not predicting that Obama and a far more Republican Congress will craft a bipartisan plan for deficit-cutting. I’m merely saying that, for the reasons cited above and those that I enunciated last week, I don’t believe that our political system and those who participate in it have lost the capacity to act.

Lawrence J. Haas is former Communications Director to Vice President Gore and, before that, to the White House Office of Management and Budget. He's now a public affairs consultant who writes widely about foreign and domestic affairs, including fiscal policy.

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Lawrence Haas
is former senior White House official and award-winning journalist, writes widely on foreign and domestic affairs. His articles have appeared in The New York Times, USA Today, Los Angeles Times, Baltimore Sun, Miami Herald, San Diego Union-Tribune