The federal deficit urgently needs dealing with, and both parties know it — which is why we won’t get a real resolution until after next year’s election. They’re most likely to give us an “autopilot” to take us part of the way.
Republicans and Democrats want to address the problem — but on their own, very different terms. Each party sees a chance to significantly strengthen its position in November 2012 — so neither is inclined to compromise now, despite rapidly mounting pressure from Washington’s fiscal failures.
Last fall’s rout cost Democrats control of the House and greatly reduced their power in the Senate. Meanwhile, President Obama is in his weakest position since taking office — and his weakest issue is the deficit.
Last week’s polls showed him with overall approval of 48 percent (CBS) or 47 percent (ABC News/Washington Post). Each poll also showed the public disapproving of his handling of the federal by roughly two to one.
In a USA Today/Gallup poll in late April, before the recent spate of bad economic reports, 46 percent said they “will definitely not vote for Obama” next year. That means he has to virtually “run the table” among the remaining voters to win re-election.
Obama needs all the political support he can get — but his most loyal supporters, liberals, want to protect the federal spending that is the deficit’s cause. So he has much more to lose than to gain by negotiating seriously.
Looking at recent precedents for bipartisan reform, he’s far more likely to resemble the Bill Clinton of 1996, than the Ronald Reagan of 1986. In 1996, Clinton was also a weakened president, having lost both houses of Congress and facing a seemingly tough re-election fight. The GOP Congress controlled the agenda and kept forcing balanced-budget plans on him until he had no choice but to concede.
In 1986, Reagan was a strengthened president, having just won a landslide re-election while holding the Senate and having great sway in the House. That let him control the agenda and secure a great bipartisan tax reform — one of Washington’s greatest recent policy successes.
Republicans would like to recreate both 1986 and 1996 — and the next election offers that opportunity. The base of support that handed them tremendous gains last fall cares greatly about reducing federal spending. The budget is a fight they don’t just want, but demand.
Yet the GOP is still a minority in the Senate — so it can’t force the president to the negotiating table, as it could Clinton in 1996. And even if it could, its position at the table could be much stronger after next November.
The battle over how to address the deficit is the most important fiscal-policy fight since the creation of Lyndon Johnson’s Great Society in the 1960s. With so much at stake, so much still to be determined and neither side able to force the other to accept their terms, each side has reason to wait.
Yes, the problem grows more urgent every day. But the best the two parties are likely to agree on for now is a “process,” not a policy, solution — that is, to settle on some sort of “autopilot” system to enforce deficit reduction.
That debate holds its own tough decisions — what thresholds trigger automatic action; the mix between spending cuts and tax hikes; which if any programs to exempt from automatic cuts, and more. But these are less difficult than a policy-dominated discussion requiring specific decisions and painful implementation.
It also means the debate will still be going on after the next election. There is always a way to fail the most failsafe mechanism — and the automatic actions will be so onerous as to force lawmakers to find an alternative to their rough justice.
Autopilots do work — but they work best in calm skies. It’s the landings, takeoffs and turbulence where you need real piloting. Unfortunately, autopilot is likely the best we can do until the next election provides more clarity in the cockpit. Let’s just hope events don’t force an unexpected landing.
J.T. Young served in the Treasury De partment and the Office of Management and Budget from 2001 to 2004 and as a congressional staffer from 1987 to 2000.