Time to stop play-acting and spit out the tea
The Republicans are not being serious about the deficit
THIRTY billion dollars is a lot of money for anyone except America’s government. In Washington it is a bagatelle: about what the feds spend in three days, or less than 2% of the predicted budget deficit for this year. Yet in the peculiar battle that is now raging over the budget for a fiscal year already half over, $30 billion is all that now separates the Republicans and the Democrats, who have been bickering for the past 14 months over the details. Because neither side thinks it can afford to back down, the risks of a government shutdown are rising fast; without an agreement, the government will run out of money on April 8th.
Some irresponsible people, on both sides of the political aisle, think that a temporary shutdown would not matter all that much. A fair few Democrats hope that the Republicans will be blamed for their intransigence, as they were at the time of the last shutdown, in 1995-96 (though they may be disappointed on that score, since public opinion swung against the Republicans in 1996 only after their leader, Newt Gingrich, made a fool of himself over a seat on Air Force One). Those of a tea-partyish persuasion imagine that they will be politically rewarded by their supporters for sticking to their guns, and that the only good government is one on enforced leave.
In the short term, it is true, a shutdown would be far from catastrophic; soldiers will continue to fight; aircraft will not collide; Social Security (pensions) cheques will mostly continue to be automatically sent out. But it would still be highly disruptive, not least for government employees who will not get paid, and it will inconvenience people and businesses in countless ways. That is no small matter while the recovery remains so fragile.
More worrying than a shutdown itself would be its implications. If the politicians’ attempts to resolve one year’s budget end in acrimonious collapse, what hope is there of reaching agreement on issues that require both sides to take much more political punishment? Later in April another battle looms, this time over the need for an extension to America’s debt limit, currently set at $14.3 trillion and now very close to being reached. A row over the fiscal 2011 budget might not alarm investors too much; a fight over authorising money that ultimately could be needed to pay international creditors is quite another thing.
And then, of course, comes the even greater challenge of dealing with America’s medium-term fiscal problems, driven mainly by an ageing population and the steadily rising cost of health-care programmes. Even once the economy has wholly recovered from the recession, these factors mean that the country faces a structural deficit of around 3%, which is not sustainable. When a bipartisan commission sketched out a way forward at the end of last year, Barack Obama and the Republican leadership raced to distance themselves from its conclusions. A government forced to live hand-to-mouth, funded by stopgap resolutions for a few weeks at a time, hardly looks like one that can calmly negotiate the radical overhaul of the American state that is needed.
Stop the play-acting
Both sides must shoulder some of the blame for the steadily worsening atmosphere on Capitol Hill. The Democrats have failed repeatedly, most recently with Mr Obama’s dishonest budget for the next fiscal year, to indicate how they intend to repair the nation’s finances. Yet even set against that miserable standard, it is the Republicans who deserve most criticism. While extracting many concessions from the Democrats, they have made precious few themselves. And while spinelessly failing to explain how the deficit might be controlled in the medium term, conservatives have vaingloriously demanded more cuts in the short term than should be inflicted on an economy as weak as America’s now is.
Left to himself, John Boehner, the Republican speaker of the House of Representatives, would probably make a deal to avoid a shutdown. But he is cowed by the new intake of theatrical extremists bent on playing at budget discipline rather than achieving it. It is time he showed some leadership. If he does not, it bodes ill for both his party and America.