Wednesday, September 12, 2012

My Suggestion on the Budget

Let's face it.  The budget process is seriously broken.  The problem is simple.  The American people hate deficits and government "spending," but are not willing to give up any services.  They simply don't see "spending" (let alone taxes) and services as connected.  Hence proclamations that one intends to massively cut spending and balance the budget are as popular as actual concrete proposals are unpopular.  And you get things like Mitt Romney saying he will balance the budget, but he won't say how because that would be unpopular.  Republicans have tried for a long time to cut Medicare costs, only to have their attempts demagogued by by Democrats.  Now Democrats are have made the attempt to control Medicare costs, only to be demagogued by Republicans.  But don't worry, Democrats are demagoguing right back.

One might compare it to emperor penguins gathered on an ice shelf, knowing that someone has to jump into the ocean, but not wanting to be the one because there might be sharks out there.  But actually it is a good deal worse.  In this case, the penguins are gathered on the ice shelf, knowing that someone has to jump in, but also knowing that as soon as one penguin jumps in the others will turn into sharks and eat it!  Appointing a bipartisan commission to come up with a plan to balance the budget has signally failed. The differences between the parties are simply too great. And neither party dares put forth anything like a realistic plan to balance the budget for fear of sharks.  It doesn't help that the deficit is artificially enlarged now because of bad economic times, but even if the economy recovered tomorrow, the deficit would be much too large.

So here is my plan, similar to what I proposed before.  Stop looking for a bipartisan agreement on how to balance the budget.  Admit the parties are just too far apart.  Instead, agree on certain ground rules of what a reasonable plan to balance the budget would mean.  I personally would favor the following:

  1. The plan will be developed now, but not implemented until some pre-determined criteria of economic recovery.  Once those criteria are reached, the plan will go into automatic effect.
  2. Only structural, not cyclical, deficits need be eliminated.
  3. The budget must balance in approximately 10 years, not more or less.
  4. Balance must be certified by the Congressional Budget Office (CBO), not some partisan outfit.
  5. The plan need not lay out every minute detail, but must be specific enough that people have some idea what is being cut, (i.e., and cut everything but Medicare, Medicaid and Social Security to a quarter its current size is not specific enough).
  6. Social Security revenues and expenditures need not be brought into balance within 10 years, but should be on the course to balance by the time the purported trust fund runs out.
These are my preferred rules; no doubt some alternate set could also be made to work.

Let each party work out its plan under the agreed-upon rules, and let the CBO rate the plans and determine if they work.  Then let the two parties run against each other, with the agreement that the winner's plan will be implemented.  Let the plan then be passed in the lame duck session.  Only by being forced to choose between two unpalatable alternatives, rather than one alternative versus all-out opposition, will the American people ever be made to submit to the discipline necessary to balance the budget.

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