fbpx
Politics Foreign Affairs Culture Fellows Program

The GOP Deserves Credit for Stabilizing Deficits, But Plight of Unemployed Ignored

In his confrontational press conference yesterday, President Obama claimed that if Congress eventually turns on the “sequester”—the $1.2 trillion in across-the-board spending cuts that lawmakers delayed in the fiscal cliff deal—he will have come close to his stated goal of shaving off $4 trillion in deficits over 10 years. As the Huffington Post’s Jon Ward […]

In his confrontational press conference yesterday, President Obama claimed that if Congress eventually turns on the “sequester”—the $1.2 trillion in across-the-board spending cuts that lawmakers delayed in the fiscal cliff deal—he will have come close to his stated goal of shaving off $4 trillion in deficits over 10 years. As the Huffington Post’s Jon Ward notes, Obama’s budget calculation derives in part from that of the liberal Center for Budget and Policy Priorities, cited by Paul Krugman and other critics of deficit alarmism.

One thing neither Obama nor Krugman mention is that a good chunk of this deficit reduction—the 2011 Budget Control Act—would not have materialized if not for House Republicans dragging Obama into the first debt-ceiling crisis.

Republicans, in other words, deserve at least half the credit for getting our fiscal situation close to the point where Obama and liberal budget wonks may breathe a sigh of relief.

A couple points, before everyone high-fives each other and calls off the debt-ceiling dogs:

Discretionary spending is the low-hanging fruit of deficit reduction. Discretionary spending programs are so called because Congress has control over their budgets—unlike mandatory programs like Medicare, Social Security, and Medicaid, whose outlays increase on virtual autopilot. Jared Bernstein, who has prodded his fellow liberals to put entitlements on the table, notes that Congress already has enacted 70 percent of the nondefense discretionary cuts called for in the Bowles-Simpson plan. Recall that these are the programs (education, basic research, infrastructure investment) that Obama really likes. The reason he has floated his willingness to accept modest entitlement reforms (raising the eligibility age of Medicare, chained CPI for Social Security), to the consternation of the Democratic base, is that he knows that programs that benefit the elderly are going to crowd out spending that he believes will “Win the Future.”

The unemployed recede further into the shadows. If we’re being charitable, we see that both parties at least notionally are interested in closing the “output gap”—wherein economic growth can’t keep pace with population growth—which is the primary reason we’re running such high annual deficits. Obama believes a proactive federal government can spur more technological breakthroughs like the internet and GPS. Republicans believe that reforming the tax code and shrinking government will do the trick. Whichever story you’re inclined to believe, you know we can’t close the gap overnight. Meanwhile, the unemployment crisis grinds on—especially severe as it is for middle-aged workers who are supposed to be in the prime of their careers and whose financial responsibilities are significantly more daunting than those of the unemployed young.

Faced with human suffering in the immediate term and the long-term crisis posed by an aging population, our political elites are paralyzed. They target marginal programs that deficit scolds don’t worry much about, and wait for the other side to take the plunge on entitlements. The jobless remain jobless. Growth remains sluggish. And the population keeps getting grayer.

Strange times we’re living in.

Advertisement

Comments

The American Conservative Memberships
Become a Member today for a growing stake in the conservative movement.
Join here!
Join here