2013 Was the Year the Grand Bargain Died. Good Riddance.

The magical thinking of the deficit-obsessed

by Mark Schmitt | December 19, 2013

photo credit: T.J. Kirkpatrick/Getty Images News/Getty Images

As Congress passes a modest two-year budget deal, it seems that our long national obsession with reducing the projected long-term federal deficit, and the quest for a grand bargain on taxes and health and retirement spending, has come to an inconsequential end, or at least a very long pause. Budget expert Stan Collender predicts that, like a rare comet, the grand bargain will not reappear until 2019. Much can change between now and the third year of the next presidency—including the strong possibility that health-care cost inflation will continue to slow, which would virtually eliminate the predicted problem.

Now that it’s past, it’s time to ask what that was all about. Why, when jobs and growth were the urgent crisis, did deficit projections far into the future, and the grand bargain, have such a hold on Washington’s attention? And why did it fizzle?

To many liberals, the answer is painfully obvious: It was plutocrats, who wanted to cut Social Security and Medicare, impoverish seniors, protect their own historically low tax rates, and shred the New Deal and Great Society foundations of the social contract, enlisting moderate Democrats and a gullible president in the task. That probably motivated some of those involved, but it doesn’t explain all of it, or why it failed. That story is too literal. In American politics, the word “deficit” is almost always a metaphor, representing far more than the actual or projected federal budget deficit. For most ordinary voters, “deficit” or “the debt” is a word representing bad economic times. That’s why public concern about the deficit corresponds to economic anxiety, and not the ups and downs of the actual deficit.  

For Washington, though, “deficit” represents something very different: It’s not a metaphor for the economy, but for the political process. The budget has become a universal, almost value-neutral language to talk about the crisis of governance. Why the budget, and not the many other staggering examples of government’s inability to address priorities—climate change, gun violence, job-creation, immigration? All of them seem to have a partisan or ideological angle—to define climate change or gun violence as a problem implies a specific, controversial solution. Deficits can be presented as a neutral problem—whatever you think about the appropriate size of government or level of spending and taxes, we should all agree that we can’t spend more than we take in. (We can, of course, but that’s another story.) Reducing the long-term deficit, then, becomes a platform to reconstruct a different kind of politics—elite-led, consensus-driven, bipartisan, pragmatic. Advocates of deficit-reduction speak in the implicit language of public-choice theory in which the interests of individual politicians, parties or ideologies subvert the public interest, necessitating an alternative structure, like a commission, or a “forcing mechanism” like the debt ceiling. The Simpson-Bowles commission, the Domenici-Rivlin commission, the congressional “Supercommittee” and the various configurations of leadership meetings involving selected congressional leaders, Vice President Biden and others were all attempts to move outside of the paralyzed normal political process and create an alternative structure for making the most critical decisions about the future. In some of them, especially the Simpson-Bowles commission, unelected figures such as Honeywell CEO David Cote would sit as equals.

The anti-deficit movement and its alternative structures should be seen less as a war on the elderly than as a branch of the well-funded, well-meaning industry of alternative politics. This includes Americans Elect (the would-be online third party that spent a lot of money and generated less than zero interest), No Labels (a non-partisan organization of members of Congress and various entrepreneurs of centrism), and others. These are not radical or outsider organizations challenging the fundamental boundaries of what’s considered possible, on behalf of those left behind. Rather, they have been created in DC, often by lobbyists and political consultants, and aim to reconstruct American politics from the middle. From the very beginning, these efforts have been intertwined with the deficit-reduction movement: How to reduce the deficit was the single question about the economy that would-be candidates for the Americans Elect nomination were required to answer, in the middle of a recession. David Walker, former head of the Government Accountability Office and the deficit-focused Peter G. Peterson foundation is listed as a co-founder of No Labels, and a “movement” to draft him to run for president emerged from within Americans Elect, which even changed its rules to give him a better shot. The youth arm of the deficit-reduction movement, a group called “The Can Kicks Back,” is run by a former Americans Elect staffer.

To this bundle of failure and magical thinking, we can add Barack Obama’s 2008 illusion that with tone and personality alone, he could transcend the partisan and ideological divides of Washington. No Labels has recently generated a burst of recent interest by putting forward an actual agenda and enlisting 84 members of Congress as “Problem Solvers” who agree to “Embrace the Right Attitude.” But as a recent Boston Globe story on the “Problem Solvers” observed, while many of them embrace the attitude at No Labels meetings and events, when they return to Congress, they are as vicious as ever. Contrary to its name, No Labels is a brand that politicians want associated with their name, not a different way of doing politics. The same was true of anti-deficit politics: While Rep. Paul Ryan and others still embrace the Simpson-Bowles Commission as a label, regularly castigating Obama for not embracing its recommendations, when they were at that table, he and his fellow House Republicans voted against it.

These illusory alternatives—the president-as-savior, the grand bargain, an imaginary third-party—have sustained glimmers of hope for American politics during a dark period. Now they’re gone, and we’re left with the plain reality of two parties with widely different viewpoints, trapped in a system that doesn’t allow either one to carry forward a coherent agenda. What we’ve learned from the last several years is that the solution probably won’t come from insider alternative-politics projects that have more funding than constituency. Nor is it likely to come from the extremes, where real popular agitation, mostly in the form of the Tea Party, has deepened the crisis of government. Perhaps, freed from illusions and magical thinking, we’ll be able to find a way forward with the government and the parties we’ve got.

Source URL: http://www.newrepublic.com//article/115998/deficit-grand-bargain-ambitions-are-dead-good-riddance