Amity Shlaes

Kai Ryssdal: There's another note from overseas today, separate from, but related to, the G8 summit: Europe's ever-increasing debt crisis. Talks between Greek Prime Minister George Papandreou and the opposition broke down this morning. They're trying to make a deal on more spending cuts and austerity budget. The European Union has said it's not going to help anymore unless the Greeks do that.

Washington is no stranger to the perils of budget negotiations, as we're seeing right now. Commentator Amity Shlaes says there's a reason for that -- beyond pure politics.


Amity Shlaes: Presidents love to game the budget system. Any plan is exquisitely timed to yield a certain short-term electoral outcome. But that same plan shows little regard for long-term consequence.

President Obama, for example, has proposed that deficits be narrowed. But only in a few years, well after his reelection campaign. President George W. Bush played a similar trick with Medicare Part D. That prescription drug benefit was a gift to voters and ensured victory in the 2004 campaign. But Medicare Part D also taxed future generations.

What makes presidents such cynical players? People are cynical when they are weak. And presidents have been weak on budgets since 1974 when the country got a new law, the Congressional Budget and Impoundment Control Act.

Before that law, presidents had some control over the budget. If they didn't like an outlay, they could impound the money, so that the departments didn't get it. Or they could use their impounding power to squeeze other concessions from Congress.

The new law restricted the executive's power to impound. And severely. Nearly all a president could do now was sign or veto. Congress, for its part, gained power. It also got its own research office, so it could make better cases for pork. And it did. The result was out-of-control spending.

It all was predicted by none other than Richard Nixon. Through an aide, the embattled executive had warned that the new law meant government by Congress. And chaos.

Today it's time to repeal the old law and restore the old balance. I'm a low-tax person. But I still want President Obama to wield more budget power -- even if I disagree with his tax policy. Chief executives who command more authority will tax and spend more responsibly. Maybe, they'll even give up the games.


Ryssdal: Amity Shlaes is a senior fellow in economic history at the Council on Foreign Relations. If you've got a comment, send it to us -- click on this contact link.

About the author

Amity Shlaes is author of the biography “Coolidge,” and she directs the economic growth project at the Bush Presidential Center.

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