Budget trigger explained
Kai Ryssdal: The Speaker of the House John Boehner went to Wall Street last night. He gave a speech to the Economic Club of New York. It was a line in the negotiating sand on the upcoming budget talks. Down in Washington today, Vice President Biden and the Secretary of the Treasury met with other members of Congress to lay the groundwork for some kind of deal. Eventually.
But really, what we're in for is a long hot summer of back-and-forth over what has to happen to keep the government from defaulting on its debt. The most recent deadline I've seen is August 2nd. But there's a move afoot to take those tough spending and taxing decisions out of congressional hands. Our Washington bureau chief John Dimsdale has the story.
John Dimsdale: In his 1950s TV show, cowboy Roy Rogers knew he could always count on his faithful Palomino to get him out of a jam.
"The Roy Rogers Show" clip: Hey, that's Roy Rogers and Trigger!
Now, folks in Washington are pinning their hopes on a different kind of horse -- a budget trigger. It works like this: if Congress doesn't start drying up the red ink, a trigger would force automatic spending cuts and tax increases.
Alice Rivlin served on three different deficit commissions that recommended triggers, and she's a big fan.
Alice Rivlin: It's a forcing mechanism, it's a sword of Damocles hanging over the head of Congress. If you don't do this, then some quite arbitrary cuts and tax increases will ensue.
For example, if government debt doesn't start falling in the next few years, President Obama proposes automatic across-the-board spending cuts and to trim some tax deductions. The president calls his trigger fail-safe. But budget analyst Stanley Collender at Qorvis Communications is skeptical.
Stanley Collender: First of all, you've got to understand we're not really talking about triggers, we're talking about silver bullets. People are looking for a painless way somehow that will just fix the problem, create a solution.
Collender says triggers in the past have only worked for a short time. For example, a trigger packing deficit law in the 1980s, called Gramm-Rudman, did cut the deficit by $20 billion the first year. But, as the deficit grew and budget cuts started to bite, people found ways around the law.
Collender: And that's the problem. You can't bind a future Congress and it's almost impossible to prevent members of Congress from thinking creatively to get around the rules.
And the trigger itself may be against the rules, says former [George H. W.] Bush Treasury official Bruce Bartlett.
Bruce Bartlett: I also think it's fundamentally undemocratic. We elect members of Congress to make these decisions and I don't think people like having government on automatic pilot.
But Alice Rivlin says if the trigger needs supermajorities to override it, it could do the trick.
Rivlin: The advantage of a trigger is if you have a very hard decision and you can't resolve it immediately, then something quite drastic will happen. So we better work on something we can actually agree on between now and then.
And since this ain't necessarily a happy Hollywood ending...
"The Roy Rogers Show" clip: King of the Cowboys. Trigger, his golden Palomino.
It may or may not save the day.
In Washington, I'm John Dimsdale for Marketplace.