Stan Collender tells us what he really thinks about the Republican Ascendancy:
Budget Battles (12/02/2003): The conclusion is as inescapable as it is unassailable: 2003 will go down as one of the absolute worst years for the federal budget in U.S. history.
The budget decisions made this year have been so monumentally and uniformly bad.... There are four reasons why 2003 should be considered the slum of federal budget years.
First, every part of the budget went in the wrong direction as far as the deficit was concerned. Can you think of another year that saw a tax cut, a significant increase in appropriations, a major new entitlement program, and a substantial appropriation for waging a war and rebuilding the country we fought -- all at the same time?
Moreover, all of this happened in the face of a record-high deficit that was projected to keep getting larger.... Even if one fervently agrees with the policies such increased spending and decreased revenues were designed to achieve, that still doesn't mean that the budget impact had to be ignored, that the policies should have been pushed at the same time, or that there was not an obligation to identify at least partially offsetting spending cuts or revenue increases.... Second, 2003 will go down in the history books as the year when the budget debate approached rock bottom. With so many misstatements, misleading arguments and outright misdirections by those who were budget-be-damned adamant about doing what they wanted to do, it became harder than ever to separate fact from fiction.
For example:
- Many defended the record deficit by saying it was needed to spur economic growth. But the complaints were about the long-term deficits, when the economy was supposed to be... no longer in need of a fiscal stimulus.
- Many said the deficit was overstated and would be lower than projected because of higher economic growth. That growth, however, was already built in to the forecasts...
- The president kept saying his policies would cut the deficit in half by the end of 2008, even though that calculation was based on spending and revenue assumptions that were not being followed when the statements were made.... Revenues were based on the assumption that expiring provisions would be allowed to expire, even though the White House was saying it did not want that to happen....
- Taking credit for cutting the deficit in half to about $250 billion.... Even if is achieved, a $250 billion deficit is nothing to be proud of....
- The argument that the 2003 deficit is not as large as the 1983 deficit... uses two numbers that should not be compared with each other. There was virtually no Social Security surplus in 1983 so that year’s $208 billion deficit represented only the operating costs of the federal government. In 2003, however, there was a substantial Social Security surplus that masked the size of the operating deficit....
Third, there was no budget discipline of any kind in 2003.... [N]o consideration was given to reimposing any of the [procedural] restrictions [on the budget]....
Fourth, 2003 will go down in the budget history books because of the long-term fiscal damage that was done. Almost all the policies that were put in place are permanent tax and spending changes....
Is there any thing good that can be said about 2003?
Yes -- it's almost over.
The really sad thing, IMHO, is the absence of resistance within the administration. All Bush administration political appointees who were ever members of the Concord Coalition or any similar anti-deficit group should be thinking long and hard about what they are doing, and when their resignation-on-principle would have the most positive impact.
Posted by DeLong at December 2, 2003 12:45 PM | TrackBack
Resign on principle? Oh, yeah right.
At best you will see "left for other opportunities" or "need to spend more time with the family."
Posted by: Alan on December 2, 2003 01:09 PM"Resign on principle? Oh, yeah right."
Please tell me, just who are the economists who have worked for this Administration who have any principle? Listen to Glenn Hubbard and flock crowing about this Administration and tell us again about principle....
Posted by: lise on December 2, 2003 01:37 PMLise
Be nice to crows. Crows have principle, though Administration economists surely don't. Caaaw.
Anne
Posted by: Anne on December 2, 2003 01:52 PMAll the would be resistors were sent packing and moved out of the White House. Given the kind of hardball politics this administration plays, I would not be surprised to hear about carrots and sticks of corporate board appointments, endowed chairs, never getting another grant funded, etc. John DiIulio still hasn't recovered from his carpet burns.
Posted by: bakho on December 2, 2003 02:49 PMI'm sure many a CEA member (not that there have been too many) has seen the compromises needed when politics drives economic policy. It is a part of democracy. The guys left with this administration have surely reconciled their economic ideology with reality in some self satisfying way. I don't think it has much to do with harball as it does with CYA.
Posted by: Zach on December 2, 2003 04:49 PMRegarding crows:
Actually, in my state I believe there is still a nuisance species law that says you can shoot a crow if it is "doing or about to do damage."
That about covers it.
Posted by: northernLights on December 2, 2003 05:50 PMThe other sad thing is the lack of resistance in Congress. Gramm and Rudman are both gone, but Hollings is still around. However, he has been Fristed to the margins of the Senate. Who would have thought John McCain would be a voice of reason. John Spratt is like a voice in the wilderness. Despite a wonderful website full of graphs and charts of the latest CBO projections, his call for fiscal responsibility gets no traction or air time.
The budget process in Congress is broken. They have abandoned all mechanisms to reign in spending. Even with complete GOP control, they cannot deliver appropriations bills on time. So they instead opt for an omnibus bill so filled with apples and oranges no staff can track it. Congress probably needs to go to 2 year budgeting or some other agreement that lets them finish on time. It doesn't help that DeLay and the GOP leadership are using the budget as a stick to punish contrary votes and beat reps into line. Vote against prescription drugs or energy bill and find your favorite pork project defunded.
The mess goes further than the Bush administration. However, the lack of leadership and mis-leadership has been appalling in the extent of the fiscal irresponsibility. What will it take to get spending back to around 20% of GDP and revenue back up to 20% of GDP??? Where will the political capital come from?? Where are the adults?
Posted by: bakho on December 2, 2003 08:08 PMOne reason not to resign- Make sure Mr. Bush gets his steel tariff policy correct this time.
Posted by: bakho on December 3, 2003 06:57 AMAt the risk of revealing a lack of faith in the supposedly democratic process in which Congress and the president operate, I will repeat something I have said before:
The only way to eliminate the possibility that the budget process will be made as wretched as it was this year, and to eliminate the embarrassing spectacle of presidential candidates bribing the electorate by promising huge tax cuts, is to make the U.S. Treasury a semi-independent agency similar to the Fed, with its own powers to increase or decrease appropriations and possibly even to veto the entire expenditure side of the congressional budget package.
Anti-democratic? Yes. But in a real, effective democracy, the type of budget outcomes we have been seeing for the past two years would not be possible. Until the electoral, media, and campaign financing systems can be fixed for good, a semi-independent Treasury is probably the only hope for fiscal stability in this country.
Posted by: andres on December 3, 2003 08:47 AMThe 2 year budgeting thing has been on my mind. Bush has spoken fondly (or, as fondly as he speaks of anything budgeting related) of 2 year budgeting, if I recall correctly citing his favorable experiences in Texas. And I wonder if this isn't a stealth process to introduce multi-year budgeting. FY 2003 wasn't finally passed until February (i.e. nearly a third of the way through the year). The budget this year has, in part, been hung up on irrelevant matters- overtime changes, FCC ownership rules, etc. If you play the line somewhere between just incompetent enough and just principlely divided long enough, you walk into 2 year budgeting windows by "accident." Stupid like a fox?
Seriouly, let's not pretend the budget is too large or complex to be handled on time- if they're serious about doing their jobs.
Posted by: tegwar on December 3, 2003 08:58 AM"let's not pretend the budget is too large or complex to be handled on time- if they're serious about doing their jobs"
This is a good point. I don't remember what it was like when the Dems ran Congress, but they probably did deliver on time. A party that does not believe in the functions of government surely has a harder time with the spending bills than one that is committed to making government work for the people.
Posted by: bakho on December 3, 2003 11:31 AMandre wrote, "The only way to eliminate the possibility that the budget process will be made as wretched as it was this year, and to eliminate the embarrassing spectacle of presidential candidates bribing the electorate by promising huge tax cuts, is to make the U.S. Treasury a semi-independent agency similar to the Fed, with its own powers to increase or decrease appropriations and possibly even to veto the entire expenditure side of the congressional budget package."
That has to be the most absurd thing I've read on the web today.
First, it's intensively anti-democratic. Secondly, it's unconstitutional---appropriations have to be made by law. Third, it's unnecessary---the Budget Enforcement Act of 1990 (with revisions in the following years) did a reasonable job of fiscal restraint. Why don't you just propose to the Republicans that they reenact it? (It lapsed after fiscal 2002.)
Posted by: Stephen J Fromm on December 3, 2003 01:27 PM