By G. William Hoagland, Steve Bell and Shai Akabas
WASHINGTON — In October, the U.S. legislative process hit rock bottom
in setting fiscal policy.
Yes, there have been other low points: the downgrade of the U.S.
credit rating after the 2011 debt-limit debate, nearly going over the
“fiscal cliff” last January, and then allowing the mindless
“sequester” cuts to go into effect in March. But the combination this
past fall of Congress’ failure to fund federal programs for 2014 —
leading to a two-week government shutdown — and another round of
debt-limit brinkmanship took the cake.
More than ever, the two parties were talking past each other, and
Congress had failed to perform its most basic function. The American
public was caught in the middle.
Policymakers eventually came to their senses and reached an agreement
to reopen government. That deal contained the first baby steps toward
returning to regular order — a stark contrast to the crisis-driven
policymaking that had become the norm. The legislation effectively
initiated a conference between the House and Senate budget committees
over the opposing budgets each had passed earlier — a conference that
had not happened in more than four years.
From the moment that bipartisan, bicameral committee was announced,
naysayers began to predict its demise — not a bad guess given recent
experience. But House Budget Chair Paul Ryan (R) of Wisconsin and
Senate Budget Chair Patty Murray (D) of Washington were determined to
prove their skeptics wrong.
By working closely together and avoiding the red lines that serve as
self-imposed barriers to success, the two veteran lawmakers forged a
compromise by their Dec. 13 deadline: the Bipartisan Budget Act of
2013. The bargain was neither sufficient in its boost to economic
growth nor in cutting the deficit, but as the first bipartisan
progress on fiscal policy in years, the bill’s symbolic importance
might set the stage for further bipartisan successes.
In particular, the agreement will bring some near-term relief to the
havoc that the sequester’s across-the-board cuts have wreaked on
defense and domestic agencies — cuts that have also been limiting
economic growth. But the deal did not produce a comprehensive solution
to those reductions, which continue through 2021. And it still
requires a funding bill by Jan. 15 for the current year. Nor did the
legislation contain real provisions to boost economic recovery. But it
is a much needed start.
A number of small deficit-reduction provisions were included in the
deal. As a whole, these are welcome and, in some cases, much-needed
changes that will save taxpayer money and help pay for the bill’s
Perhaps most important, the Bipartisan Budget Act establishes top-line
levels for annually appropriated (nonentitlement) defense and domestic
spending not only for 2014, but also for 2015. This allows the
appropriations committees to begin their work on determining 2015
spending allocations and priorities well in advance. This is how
Congress is supposed to function — not with shutdowns or last-minute
agreements to continue the status quo, but with thoughtful, deliberate
discussions about funding for thousands of government programs.
But lacking from the legislation are significant reforms to the
drivers of America’s long-term debt problem — rising entitlement costs
and an inefficient tax code that raises insufficient revenue — or an
increase in the country’s borrowing authority (debt limit), which will
be needed this coming spring.
Wary observers are looking ahead to a potential sequel to the
contentious debt-limit debates of the past few years. And on broader
economic and budgetary issues, the two parties remain deadlocked.
Republicans staunchly oppose any tax increases or short-term stimulus
while Democrats resist even minor changes to entitlements like
Medicare and Social Security. Retreating to corners and repeating
those mantras are what led to the utter dysfunction this past October.
How can we move past these impasses? Lawmakers should build on the
foundation of the Murray-Ryan budget deal and learn from what worked.
First, serious policy dialogue took the place of political posturing.
Either party could have found an excuse to “stand its ground” and
pander to its base, but strong leadership from the chairs and a desire
to get something done trumped those partisan instincts.
Second, these were serious give-and-take negotiations; both Mr. Ryan
and Ms. Murray have made clear that they held their noses and
swallowed certain aspects of the deal. But so goes the nature of
With the economy still operating well below its potential and the
looming debt problem far from resolved, Congress and the president
have just started their climb toward fiscal sanity. Yet the one good
thing about having hit rock bottom is that there’s nowhere to go but
G. William Hoagland, Steve Bell, and Shai Akabas are senior vice
president, senior director, and associate director, respectively, at
the Bipartisan Policy Center.