First, deadlines matter. Seemingly ignored, they ultimately precipitate action. Without them, negotiations would be just another forgettable bipartisan budget exercise, at most yielding a report. We should not expect the next battle’s end before March 1.
Second, the most serious deadline defines the battle’s terrain. The first fight over continuing resolutions meant annual spending was contested. The second battle raged over a debt limit increase without which spending would cease, so once again, spending was the target.
The third battle had two significant deadlines: automatic spending decreases and automatic tax hikes. The tax hikes’ importance far outweighed that of the spending cuts in costs and public perception. So tax hikes became the battleground. The next battle will be over automatic spending cuts.
Third, the only uncontested area of government’s budget over the last two-plus years has been automatic spending, or entitlements. The administration insists revenue increases are still in play but entitlements are not.
Given entitlements’ role in current and future deficits, however, a persuasive case can be made that reform is inevitable. Driven by an aging population, the costs of Social Security, Medicare and Medicaid have spiraled upward and and will continue to do so.
The fourth and final lesson learned from the current fiscal war, therefore, is this: If it is to end — and it is not clear it will — it will end only with a grand deal. This deal must have entitlement reform at its center. Without a comprehensive solution — and even with the debt limit resolved, the automatic spending cuts avoided and the rest of this year’s annual spending funded — the hiatus will only last until Oct. 1, the next annual spending deadline. The seeds for a fifth conflict are soon to be strewn.
If there is one certainty in this current fiscal war of attrition it is this: Even with a deal, the fiscal war is not guaranteed to end, but without one, it is guaranteed to continue.
J.T. Young served in the Treasury Department and the Office of Management and Budget and as a congressional staff member.