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Congressional inaction isn't an option

01-12-10bud-f1.jpg

I spend a lot of my time talking about congressional gridlock these days. Underlying my arguments is the judgment that Congress needs the capacity to act. A lot of people, of course, argue the opposite point: Our system is biased towards inaction for a reason, and a Congress that acts is a Congress that's constantly meddling. I think that position makes a lot more sense in principle than it does when you consider the budget crisis America is facing in the coming years. The Center for Budget and Policy Priorities explains:

Reducing the deficit to 3 percent of GDP by no later than 2019 (and preferably earlier) will require actions substantially larger than the biggest deficit-reduction efforts of the past — the Tax Equity and Fiscal Responsibility Act of 1982, the reconciliation acts that followed the “budget summits” between the Administration and congressional leaders in 1987 and 1990, and the reconciliation act of 1993. The largest of these trimmed deficits by about 2 percent of GDP. Over the 2013-2019 period, we will need savings about one-and-a-half to two times as large.

We've literally never had a deficit problem this large before. And it's not the fault of the stimulus or the bailout — both of which were short-term costs that account for about 3 or 4 percent of the long-term deficit — or even any particular policy. It's mainly health-care costs — in the private and public sectors — with an assist from demographic changes. But however you slice it, it's going to require some really tough decisions from a Congress that shows no capacity for making such tough decisions. Inaction isn't an option unless you're comfortable with crisis being the outcome.

By Ezra Klein  |  January 14, 2010; 9:21 AM ET
Categories:  Budget , Congress  
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Comments

This has always been a core issue for me on health care reform.

I'm unclear how you look at that graph and conclude 1) the priority for this round of reform should have been coverage, not cost 2) relatively content on the level of cost control measures in the current bill.

As you say, there are really tough decisions related to cost control-- ones that don't really first require the changes in the current reform bill-- and yet ALL of them have been punted down the road. How is that not a failure?

Posted by: wisewon | January 14, 2010 9:34 AM | Report abuse

"Inaction isn't an option unless you're comfortable with crisis being the outcome."

We are comfortable with crisis. In fact my sense is its impossible to get this government to do what it needs to do outside of crisis. When you have politicians who live by daily Gallup polls, and are elected every other year, to ask them to put the nation's interests first and sacrifice their career for the greater good is easy to do from the comfort of a newspaper column or TV show or blog, but its irrational.

This is why we're going to arrive at a bond market crisis vis a vis the debt, and why we're going to see what the world looks like at 700ppm carbon emissions.

Posted by: zeppelin003 | January 14, 2010 9:59 AM | Report abuse

I wanted to comment on something that never gets mentioned in budget talk like this.

The medicare tax rate has not changed since 1986!!! That means, while employers increase their share of compensation going to HI each year, the gov acts like they are shocked that medicare's finances are not immune to such trends.

It's simply not true that medicare is immune from economics, and that's not a failure of the public system. It's a failure of our health system, both public and private.

There's no way in the world a private company could provide the same benefits for 2.9% of payroll. They can't even provide the top-up benefits that used to be standard for that piddly amount.

So, while gov health costs soar, we ignore the fact that tax rates have to be adjusted to make up for the amount that [price increases exceed wage growth]. It's basic common sense!

History of tax rates here: http://www.ssa.gov/OACT/ProgData/taxRates.html

Posted by: rat-raceparent | January 14, 2010 11:36 AM | Report abuse

Heckuvajob, Barry!

Posted by: Grabski | January 14, 2010 2:53 PM | Report abuse

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