Charlie Arlinghaus

January 9, 2013

As originally published in the New Hampshire Union Leader

The music for the Washington fiscal cliff debate ought to be that written by Sergei Prokofiev for his “Tale of the Buffoon who Outwits Seven Other Buffoons.” Hard to believe he hadn’t of the fiscal cliff when he wrote it.

It’s easy to mock what passes for debate in Washington because we know it will recur again and again for months to come. The problem in short is that success is not possible because politicians in Washington have been released from the rules most politicians follow. What results is what would happen if gravity were similar repealed: a bunch of confused people floating about with no defined purpose.

Gravity in this case is some sort of incentive or requirement that something be accomplished. In the case of almost all local and state governments, gravity is represented by the requirement that the budget be balanced. Various factions can disagree but at the end, a deal of some sort must happen because the budget must be balanced.

The Washington problem is worse. The fiscal cliff of last week (and we have another one coming in two months) wasn’t a hard and fast thing. Not making a deal was legal. It wasn’t as if the budget had to be passed by a date certain. In fact, Washington doesn’t pass budgets anymore. They sort of want to. They all think it would be a good idea everything else being equal. But it isn’t a requirement so getting to agreement on one is difficult.

Even were they to shock those of us on the human being side of the Washington-reality divide and pass a budget, there are few requirements on that budget. Notably it doesn’t have to be balanced so it isn’t.

I’d applaud state legislators here for providing a good contrast by balancing their budget but the real contrast is that they have no other choice. They have to pass a balanced budget by June 30 – no later – and they may not spend more than they raise. They can’t disagree about how much deficit reduction is good or bad, they have to reduce it to zero.

In Washington, they can and do disagree. The budget doesn’t have to be balanced. Balancing it is difficult. So no one proposes actually balancing the budget.

One possible incentive would be a balanced budget amendment. Change the rules so Washington can do what it wants within certain guidelines but the chief guideline is that spending and revenue must match. In a perfect world, our representatives would decide when to balance and when to pay for a few large projects over time and run a small deficit.

But Congress has demonstrated that they are fairly close to the inverse of a perfect world.

Our own Senator Kelly Ayotte’s reaction to the budget debate contains the seed that might bring responsibility to her juvenile colleagues.

In the midst of the debate over record deficits, the president nonetheless signed an executive order granted federal employees and members of congress a pay increase. Sen. Ayotte quite sensibly saw this as ridiculous and introduced a bill to rescind the pay hike. The final deal included her sensible advice.

Congress can’t be expected to balance the budget if they continue to get raises for dereliction of duty. Ayotte is also a sponsor of the No Budget, No Pay bill which would keep Congress from being paid if it doesn’t pass an actual budget.

For some congressmen, actually denying them their whole paycheck should their colleagues do something they routinely do might seem too risky. Getting a majority of them to pass a rule that makes their life more difficult is a tall order but I think a variation might be possible and still provide an incentive.

Congressmen respond to their own pocketbook. A modest step would be one that provided a financial penalty but that is less severe so as to attract a few more supporters. We should reduce their salary by 5% each year that the budget isn’t balanced. For the first few years of implementation, we can set gradually reducing targets to get to zero in five or six years. Does anyone doubt that their incentives would change?

Many incentive systems like sequestration create automatic penalties for other people when Congress doesn’t get its job done. That incentive is not quite right. They might take things a bit more seriously if we penalize them for their own failures.

1 reply
  1. Raymond Pinard
    Raymond Pinard says:

    I was very disappointed when Sen. Ayotte voted to increase taxes for upper income earners. To believe that President Obama will negotiate spending cuts at a later date is foolish and naive.
    Congress must force the President’s hand on spending cuts. Make it clear republicans want budget cuts to the extent that the federal budget will be balanced in ten years. Or else no increase in the debt ceiling, no continuing resolutions on the budget, etc. Shut the government down. We will save money day one.

    Reply

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