Two seemingly unrelated news stories unfolded in Washington last week -- developments that could further stoke the flames of voter discontent across America. Taken together, these reports could also label the Democrats with an ugly and hard to erase moniker heading into the November elections: They are now the Party of Debt.
The first piece of news concerned Congressional Democrats' plan to forgo passing a budget blueprint this year – an unprecedented display of fiscal policy malpractice.
A January 2010 Congressional Research Service report demonstrates that only four times in the past 35 years have lawmakers not adopted a concurrent budget resolution (a document projecting long term spending and revenue goals). And even when the two legislative bodies have failed to reach an agreement, in every year since the enactment of the Congressional Budget Act of 1974, at least the House has produced its own blueprint and given members a chance to vote on it. How do we get our fiscal house in order if lawmakers can’t even develop a plan?
Democrats might still reverse course and produce a budget this year. But as recently as yesterday, Senate Budget Committee chair Kent Conrad told the Washington Post the chances of doing so were “fading.”
The Congressional Budget Office (CBO) provided a second piece of troubling money news last week, demonstrating the health care reform bill won’t reduce the federal deficit after all. According to the CBO, the health care law will cost $115 billion more than original projections. This new estimate means the overall price tag of the Democrats’ bill will top $1 trillion.
Senate Republican leader Mitch McConnell blistered Democrats saying the new budget estimate wiped out any of the promised deficit reduction in the health bill. “This is astounding,” McConnell said. “Here was one of the Democrats’ primary arguments in favor of their health care bill – that it would lower the deficit. Yet now we’re learning that it won’t. But you won’t hear a word about it from the people who made that argument day in and day out for more than a year.”
Rep. Paul Ryan of Wisconsin provides more evidence further implicating the Democrats as the Party of Debt in his Roadmap for America’s Future. “Debt as a share of the economy is projected to exceed 60 percent this year (2010) – greater than the 2009 level, which was the highest in 50 years – and will reach 82 percent of GDP by the end of the next decade under the administration’s policies,” Ryan writes. “The U.S. has not seen debt at these expected levels since the end of World War II.”
Even officials appointed by the Democrats in Congress to provide expert advice on these matters, such as CBO director Douglas W. Elmendorf, are sounding the alarm bells. In an April 23 presentation to the International Monetary Fund Fiscal Forum, Elmendorf issued a clear and stern warning: “Given current law and certain changes to that law that are broadly supported by the Administration and Congress, the budget deficit and debt are on a worrisome path – unsustainable in the long run and posing growing risks even during the next several years.”
Congressional Democrats’ response: Skip passing a budget blueprint this year and spend more than planned on the health care bill. It’s a legislative twist on the MasterCard commercial – running up more debt through self-indulgent spending? Priceless.
Campaign consultants, however, say this kind of process news rarely registers in the body politic. It’s too “inside baseball.” No one outside the beltway really cares whether Congress passes a budget resolution or about the contents of a CBO report. But this election cycle is different.
It began with a massive stimulus bill. Then news of enormous debt accumulation over the next ten years in the first two Obama budgets began to sink in. Now voters worry the European debt problems playing out across the Atlantic represent a picture of America’s fiscal future.
The Democrats’ growing debt blitzkrieg is also at odds with how American households are responding to the current economic situation. While citizens across this country continue to “de-leverage” – paying down consumer loans and modify spending – Democrats in Congress are in the midst of a massive debt crisis of their own and would rather kick the can than deal with it.
Some say proposing an austerity program in an election year is too risky -- spending fecundity increases incumbent popularity, the story goes. Politicians who slash popular programs will incur the electorate’s wrath. But the Party of Debt may confront a chilling new dynamic this November. Perhaps the greatest hazard is doing nothing at all.