The sequester is a cleaver, cutting good and bad government spending without rhyme or reason. If congressional negotiators can take a smarter approach, that’s all to the good.
But if they’re going to do that, shouldn’t they address the real problems? The country needs gradual deficit reduction that avoids disrupting the economy or harming the vulnerable. It needs reforms to Social Security and Medicare that put them on a solid footing for decades to come.
These are daunting challenges, but Congress’s toolbox is hardly empty. It could limit itemized tax deductions, increase Medicare premiums for the well-to-do, place caps on spending, shave federal employee benefits to bring them in line with the private sector, increase government fees, sell public assets, put more of the wireless spectrum up for bid, increase the Social Security contributions of higher-income earners, change the consumer price index.... There are literally scores of possibilities, none of them easy, but all of them offering adroit negotiators the chance to craft a long-term solution to problems that have beset Capitol Hill for years and held economic growth far below its potential.
By addressing these issues head on, Congress could move beyond the political machinations that have deeply frustrated so many Americans, and play a constructive role in the economy: promoting growth by investment in infrastructure and basic research, providing incentives for entrepreneurship and job creation. It could create a responsible framework for reducing spending as the economy grows. It could reform a tax code that everyone agrees is broken.
At some point, Congress will have to put the federal budget on “a sustainable path for the long term” in the words of the CBO. So long as it does not, the economic consequences hurt everyone. Congressional leaders seem blissfully unconcerned about this and aim only for low-hanging fruit, but Americans know that Congress can and should do better, and are rightly tired of careening from crisis to crisis. As members of Congress continue to make politically attractive suggestions that don’t come close to achieving a lasting solution, let’s urge them to get real. It’s time for Congress to go big.