Whatever Happened to Austerity?


What happened to “austerity”?

For the past few years, cutting spending was all the rage.

Now, except for the sequester, Congress shooting itself in the foot—which it didn’t expected to happen and is trying to dismantle—the notion of reduced federal spending has quieted to virtual silence.

The Republicans discovered a mistake in a spreadsheet that showed that its ideas of reduced spending–firing teachers and policemen and firemen–would somehow make the economy grow. Europe tried austerity. Some countries are entering their third recession in six years–only because unemployment dropping from 25 percent to 19 percent counted as a recovery–and are now in more trouble than before they tried budget cuts.

Here at home, we can’t cut. While the Defense Department tries reduce its budget, Congress passes legislation to manufacture weapons DOD doesn’t want. Congress doesn’t want to kill the jobs of defense contractors in their states and districts, even if DOD doesn’t need or want the weapons. Congress can’t even agree to stop giving away money to industries that no longer need it, such as farm subsidies, which cover very few people but a lot of geography and a lot of votes in the midsection of the nation.

Remember the complaint, “The Democratic Senate haven’t passed a budget in four years?” It finally did. Ho, hum.

The Congress Budget Act of 1974 passed during Watergate. Few paid attention to it. It required the President to present a budget in January and for the House and Senate to review it and pass a joint resolution by March directing the Appropriations Committees how to spend the nation’s money. That never happened.

Today, warring budgets stake out political positions and are bludgeons for attack the other party, and, of course, for getting votes. The budget itself has no teeth. It’s a road map, but like any road map, you don’t have to follow any particular route.

This year’s Republican House budget proposed the deficit to zero in ten years, mostly by shifting portions of health care costs to the states and by cutting almost $4 trillion from the safety net. Poor people don’t vote. One commentator questioned why all children should be entitled to a kindergarten. Kindergarteners don’t vote. The Republican budget didn’t touch Social Security or Medicare. Seniors vote.
The Democratic Senate budget didn’t touch Social Security or Medicare, cut defense (mostly by subtracting the cost of the wars in Iraq and Afghanistan), raised taxes, and ended up with a deficit almost half what it is today.

President Obama’s budget actually cut Social Security and Medicare, cut defense, raised taxes. He’s no longer worried about getting votes.

Social Security and Medicare are the pins that are going to prick the budget balloon. With 75 million baby boomers knocking at their gates, they are the largest and fastest growing parts of the budget, and they are on auto-pilot. Even though Obama tossed out an idea–any idea–both the House and Senate rejected the president’s budget immediately.

For years, the country has operated on “continuing resolutions.” In other words, because they can’t compromise, Congress votes to “keep doing what we’re doing.”

Don’t hold your breath. Federal budgets are not spending tools. They are political weapons. Since Congress knows little is going to change, it found one solution: just stop talking about it.

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