Where family ends for super committee and budget cutters
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Where family ends for super committee and budget cutters
Kai Ryssdal: I’m not telling you anything you don’t already know when I say this has not been a a banner year for economic bipartisanship. We had the standoff over the debt ceiling. Now the super committee is deadlocked a week before its deadline. Congress still hasn’t passed a budget for the fiscal year we’re already in.
Back in July, the president had this to say:
Barack Obama: Every day, families are figuring out how to stretch their paychecks, struggling to cut what they can’t afford so they can pay for what’s really important. It’s time for Washington to do the same thing.
That line of reasoning — that the government has to learn how to live within its means, just like a family — has turned out to be the one thing everybody could agree on. But is it true? From Washington, Marketplace’s David Gura reports.
David Gura: Family budgets aren’t that complicated. Mom and dad talk about what they want and what they need. And how much money they have. It all comes down to one question: What can we afford? So, if families budget that way every year, why can’t Congress? Jared Bernstein is with the Center on Budget and Policy Priorities.
Jared Bernstein: This is a kind of folksy sentiment that just resonates with people, it just sounds right.
It seems so simple. And like lots of things that seem so simple, it’s actually too good to be true. Right now, there is a budget conversation happening among the super committee. Its members have to find a way to cut the deficit by more than a trillion dollars. So, let’s test out the metaphor. Picture the super committeee family, 12 members strong, gathered around the kitchen table.
Jim Kessler: Debt has brought them together. This is a family that’s in financial crisis.
That’s Jim Kessler, co-founder of a think-tank called Third Way. The Super Committee is co-chaired by Republican Congressman Jeb Hensarling and Democratic Senator Patty Murray, Super Committee Dad and Mom.
Patty Murray: We all need to be willing to make some tough decisions and real compromises.
So, here’s the situation: The U.S. spends more money than it has. And as President Obama put it:
Barack Obama: The result is a lot of debt on our nation’s credit card.
Third Way’s Jim Kessler says the Super Committee family is acutely aware of the fact they haven’t planned well for the future. In the U.S., there are Baby Boomers ready to retire, thousands of roads and bridges that need to be repaired — or replaced.
Kessler: This is a family that doesn’t like to make choices that really deal with stuff far down the road. They’re really looking at their next vacation — and buying their next car right away.
Before long, Kessler says this family’s budget meeting gets tense.
Kessler: Some people in the famliy are saying, “Look, we need to cut this, and this, and this. And we can’t spend money on that. And no new washer and dryer.” And somebody else is saying, you know, “Aunt Marilyn, maybe you should go out there and get a job, and bring in some more revenue.”
The funny thing is, just as the Super Committee family falls apart, the family budget-federal budget metaphor falls apart too. A family doesn’t have to budget for wars. And it can’t print money — at least not legally. A family looks out for itself. The government has to take into consideration millions of families, hundreds of millions of Americans.
Joe Gagnon is with the Peterson Institute for International Economics. He says the government has to deal with the big economic problems — like economic downturns and high unemployment.
Joe Gagnon: For the country as a whole, the feedback actually matters. Because if we don’t spend now, and we save, it actually at least in the short term puts people out of work.
That’s not something that comes up when a family’s figuring out its budget. Here’s Jared Bernstein again, from the Center on Budget and Policy Priorities:
Bernstein: That happens to be, with great respect to the president, a terrible analogy.
He says it’s too simplistic and it flies in the face of economic theory. Bernstein argues families and the government shouldn’t tighten their belts at the same time. When families cut back, the government should step in to help. And when the economy rebounds, that’s when the government can tackle the deficit.
In Washington, I’m David Gura for Marketplace.
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