CBO Director To Budget Committee: Stop Making It Worse

Terrance Heath

The budget conference committee meets this week to hammer out a plan to avoid another government shutdown. So far, not so good. Committee co-chairs Rep. Paul Ryan (R, Wisc.) and Sen. Patty Murray (D, Wash.) are “struggling” to define the “parameters” of a “bipartisan compromise,” before the House GOP’s “kamikaze conservatives” pull the economy into another nosedive.

Congressional Budget Office director Doug Elmendorf testified before the committee this morning, complete with charts. Here’s hoping committee members read Elmendorf’s CBO blog. Concerned that his presentation could make challenges seem so large that the committee members may despair of ever tackling them, Elmendorf spelled out those long-term and short-term challenges in simpler terms.

2012 Lecture by Doug ElmendorfI noted that those challenges are related to fiscal policies in different ways: The long-term challenges can be addressed, in part, by reducing future deficits, whereas the short-term challenge has been exacerbated by the recent sharp reduction in deficits.

I finished by noting that, when I make presentations like this, I worry that my toting up of all those challenges can make the problems seem so large that it actually discourages people from tackling them. That would be unfortunate. Of course, a clear resolution of the long-term budgetary concerns would be beneficial. But even if that is not feasible right now, reallocating elements of the budget to comport better with the country’s priorities as lawmakers view them, while reducing uncertainty about fiscal policy next year and improving or at least not worsening the long-run budget outlook, would be a good thing—even if it left significant challenges to be addressed in next year’s budget process.

In other words: Stop making it worse! Our deficit is shrinking. In fact, it’s down by half since the George W. Bush administration. This year, the deficit is projected to be over $200 billion less than the CBO’s initial projection. But instead of celebrating, Republicans and deficit hawks demand more job-killing cuts that will further damage the economy.

Whatever the budgetary challenges facing the country are, and however difficult they may be, the deficit-driven cuts Republicans continuously demand only make things worse. Whether it’s the sequester or cuts to food stamps and other programs, or blocking much-needed infrastructure spending, the effect is the same. Less economic activity generated by workers spending money, or food stamp recipients using their benefits, to pay for goods and services leads to job loss and a shrinking economy.

Rep. Nita Lowey (D, N.Y.) reminded her colleagues of the deadline hanging over their heads, to pass legislation to keep the government running before the January 15th deadline. Rep. Lowey urged the committee to focus on coming up with a plan to replace the deep spending cuts of sequestration.

That’s a pretty good place to start. In fact, ending the sequester is the first item of a four-point plan for the economy, endorsed by a coalition of 41 progressive organizations and labor unions.

  1. End Job-Killing Sequestration Cuts
  2. Protect Medicare, Medicaid, and Social Security
  3. Defend Core Programs for Those Most At Risk
  4. Eliminate All Tax Incentives for Sending Jobs Overseas

The first law of holes is, “If you find yourself in a hole, stop digging.” That’s Elmendorf’s advice to the budget committee and the rest of Congress: Stop digging. Stop making it worse.

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