Obama, Congress ignore their pledge of fiscal discipline

McClatchy NewspapersApril 19, 2010 

WASHINGTON — President Barack Obama and congressional leaders vowed tough budget discipline in February when they approved a "pay as you go" requirement, but they've already avoided paying for major programs twice.

They've also let the annual April 15 deadline for producing a budget outline pass without even a vote.

So much for getting tough with the deficit-riddled federal budget in an election year.

"Sometimes, particularly in tough times like these, you have to make hard choices about where to spend and where to save. That's what being responsible means," a tough-talking Obama said in his weekly address the day after signing the pay-as-you-go law. It requires that most new spending or tax cuts be paid for, rather than add to the budget deficit. Under its terms, several programs are exempted, however, and the law also can be waived for "emergencies."

A few weeks after Obama's talk, the nonpartisan Congressional Budget Office estimated that under his proposals, the federal budget deficit should hit $1.5 trillion this fiscal year and $1.3 trillion next year. The CBO also projected deficits over the decade totaling $1.2 trillion more than the White House estimated.

Despite pay-as-you-go, Congress has passed bills twice in the last seven weeks to fund government programs as emergencies — notably extended unemployment benefits — adding about $28 billion to the deficit.

Kenneth Baer, communications director at the White House budget office, said, "We've always been up front that emergency spending should not be subject to PAYGO, and the legislation reflects that. Anyone standing in the unemployment line would agree that we face an emergency, and need to do what we can to spark job growth immediately."

Why ignore pay-as-you-go? One reason is electoral politics. With midterm elections in the fall, neither political party is eager to make the unpopular spending reductions that serious deficit-cutting requires.

"You have difficult decisions, made more complicated by extreme demagoguery on both sides," veteran budget analyst Stan Collender said.

Congress is supposed to pass a budget blueprint by April 15, but didn't; that document guides more specific spending and tax decisions throughout the year. No budget votes have been taken, and none are scheduled.

While Senate Budget Committee Chairman Kent Conrad, D-N.D., argued that "We need to say we're responsibly tackling the deficit," House Majority Leader Steny Hoyer, D-Md., cited the political climate to explain why they haven't.

"We would like to pass a budget. We have to see whether we have the votes to do so," he said. "It is difficult to pass budgets in election years."

Also inspiring timidity is the bipartisan commission that's charged with finding ways to reduce the deficit long term, which is supposed to report by Dec. 1. The panel's first meeting is set for April 27.

In light of that, some lawmakers are reluctant to make tough decisions now, since they can urge voters to wait for the commission's recommendations. "Some people say they're waiting," said Sen. Judd Gregg, R-N.H., a commission member.

Collender said lawmakers had to be careful about postponing decisions, because failure to get tough with deficits could come back to haunt them.

"Deficits are never an issue by themselves. They do, though, become surrogates for other things," he said, such as whether the government is being run responsibly.

On the other hand, he said, the chief issue this year so far is the economy, "and you can argue the deficit kept us out of a depression."

Congress claims some steps toward fiscal discipline, notably last month when it passed a $938 billion health care overhaul that the CBO estimates will reduce deficits by $143 billion over 10 years. White House budget spokesman Baer said that shows how Obama "has brought back fiscal discipline."

The projected savings — notably proposals to cut Medicare spending — are the subject of continuing controversy, however, as many doubt that Congress will squeeze Medicare funds as it forecasts.

Lawmakers see months ahead filled with hearings aimed at passing a budget for fiscal 2011, which begins Oct. 1, and some argue that it's too soon to judge whether the budget breakdown really matters. Similar pay-as-you-go rules helped balance the budget in the 1990s. Meanwhile today's economy still needs help, Democratic leaders say, so now isn't the time to raise taxes or cut vital programs.

The two bills that added $28 billion to the deficit addressed dire economic needs, said Senate Majority Leader Harry Reid, D-Nev., so they were passed under the emergency exemption. To require them to be paid for up front, he said, "would set a terrible precedent."

Others questioned that, however.

"You'd think they could find $9 billion somewhere in the vast reaches of the budget to pay for this," said Ross Baker, a professor of political science at Rutgers University, citing the cost of a one-month extension of jobless benefits.

ON THE WEB

White House pay-as-you-go scorecard

Description of pay-as-you-go law

Congressional Budget Office analysis of President Barack Obama's 2011 budget proposal

Obama address on pay-as-you-go

National Employment Law Project lost benefits estimate

Sen. Tom Coburn's proposals to pay for jobless benefits

Pew survey on attitudes toward Congress

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