Congress and the President Should Compromise on the Budget

As Congress heads home for its August recess, huge political storms are brewing over a budget impasse that will confront lawmakers when they return. The House is basing its annual spending bills on one set of relatively draconian budgetary assumptions, the Senate on a whole different set. And hanging over everything is the need for another extension of the debt ceiling to keep the government running.

In fairness to Democrats and Republicans, the paralysis is largely based on principle, not parochialism or pettiness. Democrats typically want to protect entitlements and other assistance for middle-income Americans, who have suffered significantly in recent years.

Republicans tend to worry that the burgeoning growth in entitlements, especially Social Security and Medicare, must be checked — and soon. While they agree that the middle class is beleaguered, Republicans view tax relief as a better response than government programs.

As is often the case, there is merit on both sides, and the difference in perspective on important issues is a compelling reason for why a two-party system makes for a strong democracy. But Washington is still making a fundamental error, no doubt one that constituents will point out when members return home. Important elements in each party treat compromise as if it were a dirty word. The very notion of a “Tea Party” suggests a moral clarity in the struggle to fight off oppression and promote liberty. By this perspective, the nation’s deficit and debt are the direct result of a runaway government behemoth that must be directly confronted.

By contrast, for staunch defenders of federal entitlements, any possible restraint on the rate of growth of some programs is treated like a direct assault on the poor and working classes. Many in this debate abhor the notion of meeting the other side halfway.

In some realms of public policy, compromise is wrongheaded or impossible. Causes such as the abolition of slavery and the attainment of full rights for women are historical examples where there was a right answer, but it was not the politically convenient midpoint between the two most popular positions of the day.

Stark choices in war

Military conflict is generally another case in point. You either go to war or you don’t, and trying to fudge the distinction is usually a mistake. Even within wars, some decisions can’t be blurred. For example, as we saw in Iraq, once President Bush decided to surge forces in 2007, it was important that the nation do so resolutely. We needed to make a decision and then properly resource it — or accept that we were likely headed for defeat.

But the federal budget debate is different. The battles are ongoing and never-ending, and the results are seldom permanent. The system is set up to allow debate and adjustment on an annual basis. It is also set up to require compromise when we have divided government.

Choices more palatable

If we had extremely high tax and spending burdens like some European countries, Tea Partiers might be right that it was time for a showdown about the country’s future. Or, if entitlements were about to be savaged by a heartless right wing, Democrats might be right to defend them at all costs.

In fact, our budget choices today are much more palatable. Tax rates are lower than they were under President Clinton, and virtually no one wants to raise them massively. Entitlements have just been expanded under a Republican president and continue to grow faster than inflation, and virtually no one is proposing that we actually cut them. So we have space within which to compromise.

Finally, Washington should not exaggerate government’s role in our economic future. Beyond the Beltway, the gradual recovery of the housing market, the reinvigoration of domestic energy production and U.S. manufacturing, exciting progress in new technologies such as cyber and 3-D printing, and the ongoing electronics revolution are beginning to bring our economy back — and our deficit down.

Washington does not need to be the only answer. It just needs to avoid being the main problem — and then live to fight another budget battle as the parties seek new mandates from the voters in 2014 and 2016. That is how it is supposed to work. That is why Congress and the president should seek a compromise deal now.