Politics and the Budget Debate

©1995 by Dale Franks

The president and congressional leaders just can't seem to get on the same page when it comes to balancing the budget. The main argument lies over what economic assumptions are to be used when drawing up the plan. After nearly three years of glowing praise for the accuracy of the Congressional Budget Office (CBO) calculations, the president now seems to have decided that the Office of Management and the Budget (OMB) produces better, more reasonable figures after all.

The CBO assumes that economic growth will be about 2.1% per year. The OMB says growth will be closer to 2.3%. Of course, the more the economy grows, the more revenue the government gathers as the tax base grows. That 0.2% doesn't seem like much of a difference, but in real terms it means millions of extra dollars of government spending over the next seven years. That translates to fewer reductions in spending growth in areas like Medicare and Medicaid--areas where the president has a considerable constituency in his favor.

But what no one on either side of the debate is mentioning is that it doesn't really matter whose calculations are used. No matter what the seven-year budget-balancing plan is now, it will have to be changed as the next seven years roll on. No matter what economic assumptions are used, reality will be different. In some years, growth will be less than projected. In other years, it will be more. So, every year, congress and the president will have to look at what the actual numbers are for revenues and spending, and tailor that year's budget accordingly.

The economic assumptions are only a loose guideline, which everyone in Washington knows will have to be amended each year. They could assume any amount of growth and it wouldn't matter. The only thing that really matters is how much money the government actually gathers in revenue each year, and how much it actually spends. We could assume 10% growth if we wanted to.

So why all the hoopla over whether the OMB or CBO figures are more correct? Politics. It is, after all, the beginning of the campaign season.

Both congress and the president are playing games with the budget in a bid to get public support. But the president has a massive advantage on his side in this type of conflict, especially when the Republican congressional leader expresses his sentiments with the lack of tact that has characterized Mr. Gingrich's statements. Let's face it, congress is so unpopular that almost any president can improve his popularity by standing up to it.

Of course, to do this properly, the president has to go back on a few things he's been saying over the past few years. During the '92 election, President Clinton promised that he'd always use the CBO numbers because they were so accurate. But now, he says the CBO has become the lap dog of Newt Gingrich. As if the OMB, operating out of the White House and subject directly to the authority of the president is so much more impartial.

He's backed off on Medicare, too. During the health care debate, President Clinton wanted to restrict the growth of Medicare to 6% per year. Now, with the congressional Republicans promising to do almost exactly the same thing, the president is worried that older Americans will be reduced to living in the gutter eating Alpo. Never mind that the Republican plan would only cost seniors four dollars more per month than the president's plan.

So far, the president's strategy has been fairly effective. He has painted the Republican congressional leadership as a collection of Luddite barbarians who want to kill old people and turn poor, unwed, teenage mothers out into the street while at the same time packing their children off to orphanages.

In all fairness, though, it must be said that the Republicans have been remarkably ineffectual in countering the president's claims. I don't know who's handling PR for the Republicans, but he should be placed in a bamboo cage and poked with sharp sticks (Not that it's the easiest job in the world. After all, would you want to be the person responsible for explaining Newt Gingrich's latest verbal bombshell?). The Republicans may have all the facts on their side, but they just aren't getting the message out. They are additionally hampered by the fact that many of the people who will be affected by the cuts are not Republican constituents. The Democrats are not slow to point this out, implying that the people who will be hurt most are conspicuously poorer and darker-skinned than most Republican voters.

Another reason why the president wants to keep this argument going on for as long as possible is that he knows that when it's over, the debate will have to turn to the real, substantive business of actually making the budget cuts. The president is a smart guy. He can crunch numbers as well as anybody else in DC. And he knows that to balance the budget, he is going to have to agree to some cuts that are not going to go over well with his constituency.

It's in the president's best political interest to prolong this meaningless debate over who "scores" the budget for as long as possible. Sooner or later, he will cave in, point by point, and give the Republicans substantially what they want. In the meantime, he can accuse the Republicans of being mean-spirited, cruel ogres intent on victimizing the old and helpless. And after its all over, he can blame the Republicans for forcing him go along with them. If he plays his cards right, the Republicans will have to counter a serious negative perception when they go into the election campaign. If the Democrats win back a majority in that campaign, the whole budget debate will take on a vastly different tone.

It may seem crass and callous, but that's how these kinds of calculations are made in Washington, DC.

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