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Half a cheer for the budget deal
James C. Capretta
发表日期2019-07-31
出版年2019
语种英语
摘要While there are plenty of reasons to dislike the Bipartisan Budget Act of 2019, which the House passed last week and the Senate will before the August recess, perhaps it is best to begin with the agreement’s modest positive attributes. For starters, the deal represents a bipartisan compromise at a time when compromise is seen as treason in some quarters. The unwillingness in recent years to engage in the give-and-take that is natural and necessary in legislative debate is one reason large national problems such as immigration and entitlement reform have festered. When the leader of the Democratic House works out an agreement with the Treasury Secretary of a Republican administration, that’s a normal way of conducting business in our constitutional system (even if what they agreed to isn’t particularly praiseworthy). The hope must be that the two sides can build upon this agreement to address pressing problems that require the parties to take risks rather than the easy way out. The deal also faces up to unpleasant and easily deduced political realities that factions in both parties try to ignore. First, it raises the caps on discretionary spending for defense and nondefense accounts in 2020 and 2021. The previous bipartisan deal, reached in early 2018, raised the caps for 2018 and 2019 but not for 2020 and 2021. The result was spending last year and this year that is well above the levels authorized for the next two years. Hitting the current caps in 2020 would require a $71 billion reduction in defense funding and a $55 billion cut in nondefense accounts. There was never any hope of Congress approving cuts of this magnitude but that hasn’t stopped members of both parties from deluding themselves into thinking they could protect their priorities without giving ground to the other side. Earlier this year, the Trump administration tried to sell Senate Republicans on a strategy of not raising the caps while using an account for war fighting to keep rebuilding the military. House Democrats were never going to let that happen, and Senate Republicans were not interested in following that course either, both out of concern for appropriately funding defense and because they want to add money to nondefense accounts too. Meanwhile some House Democrats were pressing their leaders to seek large domestic spending increases with a minimalist adjustment for defense. That also wasn’t in the cards, and couldn’t even get through the House, much less the Senate. There was only one route to avoiding a protracted standoff, and that was a compromise on appropriations that added money for both defense and nondefense. The only question was the amount that would be added. There is also a persistent temptation among some conservatives to believe the nation’s fiscal problems can be addressed primarily by squeezing appropriated spending. In its 2020 budget, the administration proposed to reduce nondefense appropriations from $722 billion in 2018 to $458 billion in 2029. This is the slice of the budget that funds scores of federal agencies and programs, like the National Institutes of Health, the park service, the IRS, and others. While there’s plenty of waste in all areas of government, there is no prospect of a massive cut coming in future years. Indeed, as the nation’s population increases, the budgets for many domestic agencies and programs are more likely to grow than to shrink. The bipartisan budget deal is further evidence that fiscal plans touting deep cuts in appropriations are not to be taken seriously. Second, the deal raises the debt limit for two years without the brinkmanship that needlessly risks spiraling into a crisis. Although an increase of some duration was inevitable, it was never certain good sense would prevail without an extended period of high anxiety. The danger of stumbling accidentally into a default has been growing with political polarization. This deal signals that sufficient members both parties still understand what a disastrous self-inflicted would that would be. These points in favor of the agreement, while real, are weak when put up against its major defect, which is that it authorizes another massive spending spree — on the heels of last’s year’s agreement — at a time when the government is at full employment and running large deficits. The Congressional Budget Office (CBO) estimates the deal will increase appropriated spending by $320 billion over ten years, but that only considers the added costs from higher appropriations in 2020 and 2021 (some of the funding will be spent in later years). The actual cost is really $1.7 trillion over ten years because the higher spending level in 2021 will become the starting point for recalculating an inflation-driven baseline of appropriated spending in 2022 and beyond (CBO assumes appropriations grow with inflation unless there are statutory caps indicating an alternative growth path). CBO will incorporate this higher baseline into its next ten-year forecast, which should be released in the coming weeks. The two offsets in the package, totaling $54 billion over ten years, are as pathetic as they come. One is an extension of custom fees already in current law. These fees are a permanent feature of the nation’s tax system but are sunsetted to allow periodic extensions to create illusory new revenue. The other — across the board cuts in mandatory spending, mainly Medicare provider payments, mandated by the Budget Control Act of 2011 — is similar. The cuts have been in effect since 2013 and were already scheduled to last through 2027. The agreement extends them for two more years. The deal is a budget-buster mainly because the Trump administration offered little resistance to House Speaker Nancy Pelosi. It is not hard to imagine a better version of what is about to pass. It would authorize somewhat lower appropriated spending levels and then freeze spending at the amounts authorized for 2021 for the years that follow by extending the caps. It would then offset the added costs with entitlement spending reforms, many of which could be pulled from the administration’s own 2020 budget. For instance, the 2020 budget includes more than $500 billion in savings from reducing what Medicare pays for services. Many of the proposals are similar to ideas advanced by the Obama administration. Democrats would insist on balancing spending reductions with new revenue. That could be done with fees and other items that Republicans could argue are not tax increases. A deal constructed along these lines would have been much tougher to pass because it would have required monetary sacrifices from some constituencies. That is in the nature of responsible governance. Unfortunately, neither side had any interest in taking on a politically challenging agreement. They chose instead to follow the path of least resistance, which, as usual, meant making both parties in Congress happy at the taxpayers’ expense.
主题Politics and Public Opinion ; Economics ; Legislature
标签Congressional Budget Office (CBO) ; health care
URLhttps://www.aei.org/articles/half-a-cheer-for-the-budget-deal/
来源智库American Enterprise Institute (United States)
资源类型智库出版物
条目标识符http://119.78.100.153/handle/2XGU8XDN/266204
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James C. Capretta. Half a cheer for the budget deal. 2019.
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