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Lose Those Gridlock Blues
Despite the greatest reversal in Congressional leadership in 50 years, gridlock remains unchanged.
Though the term is used in reference to all sorts of governmental indecision, "gridlock" has come to apply specifically to the inability of Congress to resolve the federal budget deficit.
Most American political phenomena are long-standing, notably a 200-year history of richly fetid "negative" campaigns. (Instead of a ban on negative campaigns, could we please forbid all the whining about "new depths" and "unprecedented nastiness" during every campaign? Slung mud has long been a proud sign of vigorous American democracy.) On the other hand, budget gridlock is a recent phenomenon, only 14 years old.
Gridlock appeared in 1980 with Jimmy Carter's last budget and the election of Ronald Reagan. Though the U.S. had run budget deficits every year for nearly 20 years, they had been relatively small. In 1980, the Federal deficit attracted the first use of the "massive" adjective for the then-unthinkable total borrowing of $60 billion.
The opposing sides of the gridlock were quickly and sharply defined.
Republicans wanted to cut social spending, and use the savings for tax cuts and increased defense spending. As a priority, the deficit came in 'way behind the other objectives. ("Voodoo economics" was the fringe theory that tax cuts would so stimulate the economy that the deficit would evaporate by itself. Not even many Republicans believed that Laffer whopper.)
Democrats wanted to increase social spending, and would raise the money by increasing taxes and cutting defense spending. The deficit was a lower priority for the Democrats as well. (Democratic deficit voodoo was the hope that somehow the rich could be made to pay for the whole thing.)
The political basis for the gridlock disagreement has not changed in the slightest fourteen years later. Why is the budget debate so intractable?.
The persistence of the gridlock has to do with the source of the deficit. Though the Democrats' argument about Reagan defense spending has some merit, the deficit began with commitments for social spending in the 1970's, the last, great spasm of the Great Society.
Unfortunately, the growth of American incomes flattened out at about the same time. Though it frustrates the Democrats, increased incomes in the future are the only way to pay for increased future benefits. Since the mid-1970's, total government revenue has remained constant at about 19% of gross national product, but total government spending has risen to about 23% of GNP. The gap is the annual deficit.
Everybody has a theory about why the American people seem so grumpy: it's Clinton, it's Baby Boomers facing middle age, it's job insecurity, it's a values problemÉ. all sorts of stuff. Here's my theory: the only solution to gridlock has been (and still is) higher taxes to pay for current benefits, and a lot of unpromising about future benefits. We haven't been paying for what we have, and we can't afford what we thought we were going to get. That's a prescription for a very cranky electorate.
Fortunately, gridlock has not been completely intractable. There have been three equitable, bipartisan, and successful efforts to deal with part one: paying for what we have. Nobody got any credit for any of them, and the people who put them together usually had sense enough not to try to take credit.
The first big deficit reduction was in 1983, when a Republican president and Senate pushed through the largest tax increase in American history, at least in part to repair the voodoo tax cut of 1981. The second was George Bush's suicidal breach of promise in 1990, which was as good and fair a piece of public policy as you'll see. The third reduction was Mr. Clinton's in 1993, another reasonable compromise, though the "peace dividend" was spent on social programs without quite saying so.
The country has made authentic progress on the "structural" deficit. By 1994, we are mostly paying for what we get. A $200 billion deficit in an eight trillion dollar economy is nothing to worry about.
However. We aren't paying for what we thought we were going to get. There is really a extra $100 billion in the deficit each year because we are spending the Social Security money we are supposed to be saving for the Boomers' retirement. Other future promises will take the annual deficit back up to $400 billion in ten years ($500 billion, if you count the Social Security raid).
Does this new increase to come mean that the deficit is some perpetual, rolling disaster? No way! Chill out: it's almost over, and we won. The last three compromises worked. We are only another two compromises of the same size away from a solution, and there is no terrible urgency. Ten years is a long time.
Meanwhile, don't be cross: enjoy yourselves. Forget about gridlock for a while. It's okay to get excited about the debate shaping up in Washington, no matter which side you're on. Maybe Republican ideas about how to achieve prosperity will work. Surprise prosperity would sure make the last deficit steps easier. Maybe the Republicans will fail, but I'll bet the pressure from them will have a salutary effect on future policy from the Democrats.
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