President Obama’s recent budget speeches have drawn the battle lines for the coming policy debates and likely the next election: the issue of debt, deficits and spending.
Yet, even the very best efforts barely get at the problem. House Budget Chairman Paul Ryan’s plan, unquestionably the most serious proposal offered since at least then-Rep. John Kasich’s in 1995, reduces deficits by trillion over the next decade. That’s an impressive figure until compared to the magnitude of the burden. Similarly, the president and congressional leaders’ boast that the continuing resolutions recently passed contained the largest spending cuts in history only speaks to an ingrained congressional habit that budgets always increase. The $1.6 trillion deficit is a staggering sum, but it pales in comparison to the national debt, which is nearly 10 times that, and unfunded future liabilities are multiples higher.
We are still too inured by the practice of debt feeding current consumption. Borrowing is a tax on the future, a drag on the economy as debt crowds out other investment, and a temptation to monetize the problem through inflation. It is the ultimate “free lunch” that both parties and multiple presidents have long accepted, but the bill is coming due. After virtually ignoring the work of its own Bowles-Simpson commission on the subject, the Obama administration surreptitiously lobbied Standard & Poor’s not to downgrade the national credit rating, revealing how even the profligate fear the trajectory of this fiscal train.
Presidential elections do not always offer clear policy mandates (see the elections of 1996 and 2000), but the GOP version of fiscal sanity will be tested in 2012. The battle has been joined as the president stakes his re-election on the assumption that the status quo, sprinkled with higher taxes, will be politically successful.
The path ahead will require a unity and seriousness for the GOP as every dispute has political and economic significance. It will call for a consistency and mettle that few political bodies have ever mustered. Republicans must convince the public that the times require no less.
GREGORY C. McCARTHY