Responsible budget a real possibility?

Kai Ryssdal Nov 15, 2006

KAI RYSSDAL: Congress voted to keep the lights on for another couple of weeks today. The House passed a temporary spending bill that runs out December 8th. The Senate’s scheduled to vote on it later this week. But it still doesn’t look like the lame ducks will wrap up work on all of the spending bills they’re supposed to. So, come January, the new Democratic-controlled Congress will have plenty of budget work left to do. And with that change in parties, chances are pretty good there’ll be a change in budget priorities.

Maya MacGuineas is president of the Committee for a Responsible Federal Budget. It’s a bipartisan group in Washington. Maya, good to have you with us.

MAYA MACGUINEAS: Thanks for having me.

RYSSDAL: The Democratic majorities, the new ones in the House and Senate ran talking a lot about fiscal responsibility. How do you think that they’re gonna get to the point where that can actually happen?

MACGUINEAS: Well, that’s right. I was encouraged that we heard a whole lot about fiscal responsiblity during the campaign. That said, fiscal responsiblity is something that’s easy to talk about but not so easy to achieve. And if you look at the various sides of the budget — kind of what they’ve been talking about on the spending side and the tax side — it’s not entirely clear how they’re going to make it all add up, to be really fiscally responsible governing. Yet, I still remain hopeful that they will find a way to do that.

RYSSDAL: It is sort of a zero-sum game. You have to do some combination, it seems to a lot of people out there, of cutting spending and raising taxes. Do you see either of those happening?

MACGUINEAS: What we heard a lot about was increases in spending in some areas of the budget — homeland security or help for victims of Katrina — a lot of things that would make sense to a lot of people. But also paired with further tax cuts, albeit different ones than the Republicans were talking about. Not so much about any specific tax increases, with the exception of not keeping some of the tax cuts for the wealthiest Americans that have been there and are set to expire at the end of the decade. And not so much about specific spending cuts that we’re likely to see. So you still have the real question of what taxes will go up and what spending will go down.

RYSSDAL: One of the things we heard a lot about in the last Congress and then it sort of faded away, actually, was a concept called pay-as-you-go budgeting. Do you think the Democrats will take us back to that?

MACGUINEAS: I do. Pay-go is really the central component of what Democrats got specific about in terms of how they would fix the budget situation. It means that any new spending on entitlement programs or tax cuts would have to be offset elsewhere in the budget so it wouldn’t grow the deficit. That is very helpful in keeping things from getting worse. However, what it doesn’t do is fix the problems that we face. It doesn’t reduce the budget deficits that we already have, and it doesn’t do anything to fix the long-term funding gaps that we have in our biggest programs — Social Security and Medicare.

RYSSDAL: You know, Maya, the budget is a tough enough problem, even forgetting about what’s not in the budget. I’m talking here about the wars in Iraq and Afghanistan. They’ve been funded on emergency bases for four-and-a-half years now. Do you think that might actually return to the budgeting fold and get on some kind of cycle?

MACGUINEAS: Well, that’s one of the things that the Democrats would most like to see. They’re going to come as close as they can to insisting that we budget for the war and spending in Iraq and Afghanistan in the budget. However, the Republicans on the budget committees were asking for the same thing and the White House did not submit budgets that fully paid for expenses we knew we would incur. And my guess is that they won’t again.

RYSSDAL: All of this is tricky to deal with because the budget is so attractive as a political tool — political earmarks and bringing pork back home to the district. It’s a tough thing to ask congressman and members of the Senate to sort of back away from that, don’t you think?

MACGUINEAS: It is a tough thing. I mean, on one hand you come to Washington to do the right thing and most politicians, when they are borrowing trillions of dollars to pay the bills, know it’s not the right thing. On the other hand, it’s not going to change unless voters demand that it do. But when you dangle tax cuts or further spending in front of voters, they’re going to be hard-pressed to say “No, no, don’t give me that tax cut. I’d rather have you reduce the debt. But in the end, that’s what we need to have happen. You need voters to be able to reward those hard choices, when politicians make them, at the ballot box. And that’s something that’s kind of necessary for success on this.

RYSSDAL: Maya MacGuineas is the president of the Committee for a Responsible Federal Budget at the New America Foundation. Maya, thanks a lot for your time.

MACGUINEAS: Thanks so much.

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