Calls for fiscal responsibility bring to mind
Samuel Johnson’s
adage about “the triumph of hope over experience.” As our nation continues to grapple with the consequences of massive debt monetization arising from a two-year spending blowout and ratio of debt to gross domestic product near its recent historical high, we should hope that meaningful deficit reduction is soon on its way. If the president and the new Congress will heed a few lessons from past experience, perhaps some hope may be warranted.
Over the past 50 years there have been numerous congressional efforts to reduce budget deficits. Most clearly failed, although some, such as the Clinton-Gingrich agreement of 1997 and the Budget Control Act of 2011, achieved noteworthy savings in their day. Even successful agreements had only marginal effects on long-term national debt. Why? Because with the possible exception of
Ronald Reagan
and Speaker
Tip O’Neill’s
Social Security agreement of 1983, those agreements didn’t meaningfully reform spending on entitlements such as Medicare, Medicaid and Social Security.
Today entitlement spending comprises 64% of the federal budget and continues to grow unsustainably. With growing global threats to our national security, paring back the defense budget may be off the table; and mandatory interest payments on the national debt are off the table. What remains is 16% of the total federal budget. What has been true for years is even truer today—the impending debt crisis will never be avoided without addressing entitlement programs. It is simple math. Let’s hope the president, who bashed the idea shortly before Election Day, takes note.
Experience also teaches us of the necessity of bipartisanship. In 2005, President
George W. Bush
championed the cause of personal carve-out accounts in Social Security to maintain its solvency. He did so, however, when government was under unified Republican control. The historic initiative was universally opposed by Democrats, and after fighting a partisan battle for several months, Republicans sounded retreat. Deficit reduction is heavy lifting, but divided government represents more opportunity than impediment.
Mark Twain
once wrote that public opinion “settles…
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