The budget预算 The real fight begins真正的战斗打响了
As a government shutdown looms, an attempt to grapple with America’s long-term deficit problems is at last under way
CONGRESS may not be very good at passing budgets, but that is not for lack of discussion of them. This week it was by three overlapping budgetary debates: about a “continuing resolution” to keep the government up and running for the rest of this fiscal year, about next year’s budget and about whether to raise the legal limit on the federal government’s debt. Lawmakers have just under six months to sort out next year’s budget, and under six weeks before America’s debt reaches the current ceiling. But without a new resolution, the government’s authority to spend will expire at midnight on April 8th, forcing much of it to shut up shop. As The Economist went to press, the Republicans who run the House of Representatives, the Democrats who run the Senate and Barack Obama himself were holding last-ditch talks, but also warning their staffs to prepare for a shutdown.
This cliffhanger is the culmination of months of fiscal bickering, punctuated by stopgap continuing resolutions. Since February the Republicans have been holding out for $61 billion in cuts to this year’s budget, including assaults on favoured Democratic causes such as public broadcasting (see article). The Democrats argue that their proposal is too extreme, too political, and too narrowly focused. The previous two continuing resolutions, which had lifespans of two and three weeks respectively, were intended to allow the two sides enough time to hammer out a compromise for the rest of the year.
Predictably, much of that time was instead spent grandstanding. The House recently passed a bill stating that if the Senate did not pass a budget of its own, the House’s $61 billion cut, which the Senate had already rejected, should become law anyway. Needless to say, the Senate did not embrace this idea. House Republicans then took to protesting on the Senate steps each day, calling on the Democrats’ leader in that chamber, Harry Reid, to resign. Meanwhile, a group of tea-party activists threatened dire vengeance on any Republicans who voted for anything less than the full $61 billion of cuts. A bipartisan group of 64 of the 100 senators sent Mr Obama a letter asking him to find a solution to their problems. Mr Obama called Congress’s failure to pass a budget “inexcusable” and said that he would summon the leaders of its two chambers to the White House every day for talks until a deal was done.
A man with a plan谋略之士
It was into this maelstrom that Paul Ryan, the Republican who heads the House Budget Committee, released his proposed budget for next year on April 5th. He claimed it would slash spending by $6.2 trillion over the next ten years and the projected deficit by $4.4 trillion relative to the proposal the president unveiled in February. All of this would place America’s finances on a sounder path—though critics note that Mr Ryan’s figures are based on some highly implausible assumptions, such as a prompt collapse in the unemployment rate and a surge in growth thanks to lower taxes. Whereas under the president’s plan debt would continue to rise steadily towards 100% of GDP, Mr Ryan’s would supposedly see it peak just shy of 75% of GDP in 2013 and decline thereafter.
The Republicans claim to be able to achieve this feat by taking an axe to two of the biggest and most politically sensitive items in the budget: Medicare, government subsidised health-care for the elderly, and Medicaid, its equivalent for the poor. (There are limits to the number of live rails Mr Ryan is willing to grasp at once: his budget leaves intact the biggest single item in the budget, Social Security, the state pension scheme). These three “entitlements” already account for over 40% of government spending and are growing so fast that they will theoretically consume all government revenue within a few decades.
However, the Republican proposal does nothing actually to cut the cost of health care. Instead, it transfers the burden to the states, in the case of Medicaid, and to the elderly themselves, in the case of Medicare. Medicaid would be transformed into a “block grant” to the states, allowing them much more discretion over how the money is spent. But the size of each state’s handout would be tied not to runaway medical inflation, but to the much more sedate general price index. This would trim the federal government’s projected outlay by a third within a decade and half within two, obliging unfortunate state governments either to cough up far more themselves or to reduce coverage.
By the same token, under the Republicans’ plans for Medicare, the federal government would subsidise private health insurance for the elderly, instead of itself paying most of the cost of treating them directly to hospitals and doctors. Mr Ryan claims that the resulting competition among insurance firms would lower the overall cost of treatment. But the non-partisan Congressional Budget Office disagrees, arguing that private coverage tends to cost more than public, and that both would continue to suffer from cantering inflation. This would have a doubly pernicious effect for patients: not only would the overall cost of treatment rise, but so would the proportion of it they have to pay.
Such measures would be devastatingly unpopular. In a poll last month by the Pew Research Centre, two-thirds of respondents opposed any changes to Medicare and Social Security. Republicans themselves made hay at the last election with the much more modest cuts the Democrats’ health-care reforms made to Medicare (remember “death panels”?). Democrats are returning the favour by depicting the Republican plan as the complete unravelling of America’s Great Society safety net. That is not so far from the mark: two-thirds of the proposed savings would come from programmes to help the poor, according to the Centre on Budget and Policy Priorities, a think-tank. Among the casualties of Mr Ryan’s axe would be Mr Obama’s health reforms, aimed at helping the uninsured get health cover.
这类措施定会受到民众的强烈反对。上个月Pew Research Centre 发布的一项民调显示，三分之二的受访者反对对医疗改革方案和社会保障制度做任何改变。共和党人在上次选举中充分抓住了机遇，提出了更为谨慎的削减支出方案，正如民主党人充分利用机会提出针对医疗改革的方案（还记得“死亡小组”吗？）。民主党回敬共和党称共和党人的方案目的是建立“完全分散”的美国大社会安全网络。这还并未偏离标准太远——根据智库预算和政策优先事项中心的数据，三分之二的预期收入将来源于旨在帮助穷人的项目。瑞恩先生改革大斧砍伤的将是奥巴马总统的医疗改革方案——该方案旨在为未加入医疗保险的人提供援助。
Mr Ryan’s plan also ignores the received wisdom in Washington that any grand deficit-reduction package will have to include bitter medicine for both parties, in the form of cuts to the entitlements particularly cherished by Democrats and revenue-raising measures that are anathema to Republicans. Instead, it would use the savings it would garner by eliminating many of the loopholes and exemptions in America’s tax code to pay for big tax cuts, not deficit reduction. These will mainly help the better-off.
Indeed, the Ryan budget contains many affronts to Democrats, from repealing their prized health-care reform to instituting over the long run cuts to discretionary spending far deeper than those the Democrats are so doggedly resisting in the row about this year’s budget. So it will never get through the Senate, and if it did, it would be vetoed by Mr Obama.
Not all of Congress, however, has declared total partisan war. Three Democrats and three Republicans in the Senate, nicknamed the “Gang of Six”, continue to discuss a budget deal based on the magic formula of cutting spending on entitlements as well as discretionary items while raising revenue in the guise of tax reform. The letter the 64 senators sent to Mr Obama explicitly endorsed this approach, despite the flak the gang’s Republicans have received for so much as mentioning the idea of raising government revenue.
Alas, there is no guarantee that their efforts will bear fruit. The rancour of the debate about this year’s budget has done little to calm tempers in Congress. Moreover, there are more nerve-racking deadlines to come. By May 16th at the latest, the Treasury says, America’s debt will have reached the limit set on it by Congress. Given the impossibility of erasing the deficit by then, the ceiling will have to be lifted. But many Republicans have said they will not do so unless Democrats endorse cuts of a much greater magnitude than the ones they were resisting this week. The fiscal melodrama has a few more weeks to run before its electrifying final act.