By tradition, the player selected last in the National Football League’s annual draft is designated “Mr. Irrelevant” because he is so unlikely to play a significant role in the game. But in Washington, there can be more than one Mr. (or Ms.) Irrelevant. At the moment, the most prominent ones are Barack Obama and Mitt Romney.
By tradition, the player selected last in the National Football League’s annual draft is designated “Mr. Irrelevant” because he is so unlikely to play a significant role in the game. But in Washington, there can be more than one Mr. (or Ms.) Irrelevant. At the moment, the most prominent ones are Barack Obama and Mitt Romney.
The federal government is in the midst of serious fiscal crisis and hurtling toward a much worse one. And what do the two presidential candidates propose to do about it? Mostly, they intend to yammer about fiscal measures in a way that suggests they are oblivious to reality.
On Monday, President Barack Obama made a nationally televised announcement, proposing to extend the Bush-era tax cuts, which are due to expire at the end of this year, for everyone except those making $250,000 a year or more. It’s a step that would widen the federal budget deficit by $175 billion a year, compared with letting all the cuts expire.
But as Obama knows, his recycled proposal has no chance of passing the Republican-dominated House of Representatives during this campaign season — just as it had no chance of passing when he proposed it in 2010 and 2011. The House, of course, prefers to renew all the tax cuts, at an annual toll of $225 billion.
Not that extending some or all of the tax cuts at the end of 2012 is a bad idea. Barring such an extension, rates will go up and money will be sucked out of an economy that is already sluggish. The current slowdown might turn into an outright recession. This is not the time for a tax increase.
But neither is it a time to ignore the steadily growing fiscal hole we are digging. Any extension should be part of a broader package that includes concrete measures to bring down the long-term deficit. Neither side wants to address that issue. They would rather leave it for later, or never.
One of the few instances when both accepted needed sacrifice was in last year’s debt ceiling showdown. The resulting plan called for $900 billion in specified spending cuts over a decade. A so-called congressional supercommittee was tasked with finding another $1.5 trillion in savings, and if it failed — which it did — the deal called for $1.2 trillion in automatic cuts roughly balanced between defense and non-defense programs.
Republicans as well as Democrats signed on, but now Romney is promising to tear up the deal because of its impact on the military. The cuts would be large, and they would take a lot of discretion away from the Pentagon, which are two legitimate complaints.
But Romney would do more than simply rescind all the savings stipulated in the debt ceiling bill. He wants to sharply boost the defense budget — even though the United States has withdrawn troops from Iraq and is winding down its mission in Afghanistan.
His plan, says Cato Institute analyst Christopher Preble, would mean nearly $2.6 trillion in additional defense outlays over the next decade — making it 45 percent higher (in inflation-adjusted dollars) than it was under President Ronald Reagan during the Cold War. A defense buildup of that magnitude is politically unrealistic and financially unaffordable.
Sometime before we arrive at the fiscal cliff that looms at the end of the year — that’s Federal Reserve Chairman Ben Bernanke’s term for the simultaneous automatic spending cuts combined with across-the-board tax increases — politicians will have to stop playing chicken and actually reach a compromise on the difficult fiscal choices the country faces.
But so far neither of the major-party presidential candidates will do more than pander. Obama and Romney are devoid of serious proposals, leaving businesses and individuals to guess what will happen. Their irrelevance and irresponsibility leave the U.S. economy hobbled by uncertainty. With so many unknowns looming less than six months from today, job creators have plenty of understandable reasons to delay investing in new hires. Investing, that is, in new workers.
Obama and Romney have chosen to dodge the issue. If they and their similarly feckless comrades in Congress persist down this dead-end path, the consequences of their reckless posturing will not be so easy to evade.