Debt Ceiling 2013: Democrats Have Failed to Provide a Vision For Future Prosperity

Over the last four years, one of the most reliable Republican talking points has been excoriating the Senate Democrats for their failure to pass a budget resolution. The Democrats’ failure is serious, but not for the reasons that political rhetoric usually revolves around. Instead, the lack of a budget demonstrates the fissures within the Democratic Party and, more importantly, illustrates America’s long-term deficit problem.

Two weeks ago, the Republican Party’s weekly address focused around this theme, with Senator John Thune (R-S.D.) telling viewers, “I think most American families would agree that having a budget is essential to keeping their spending under control. Yet it's been almost four years since the Democrat-led Senate passed a formal budget.”

As is usually the case with political rhetoric, the truth is more complicated than Thune’s chiding would have viewers believe. The budget process is actually separate from the appropriations process which sets federal spending. Budgets are long-term frameworks that explain long-term policy priorities and Congress’s ideal funding level for them, and this blueprint guides Congress as it passes appropriations bills which actually allocate federal spending to particular purposes. While budget resolutions can have some teeth in the form of discretionary spending caps and reconciliation instructions, this only happens if the House agrees to the Senate’s budget or if 60 senators vote in favor of a resolution “deeming” the Senate budget to have been passed by the House. Neither of these conditions will occur in the current political climate, as the Republican-controlled House would refuse to pass the Senate’s budget just as the Senate has rejected the House budget, and Senate Democrats do not have the necessary 60 votes to “deem” the budget passed. Additionally, the spending caps that would normally be put in place by a budget resolution have instead been established by the Budget Control Act that emerged out of the debt ceiling standoff in 2011.

Failing to pass a budget is a serious failing however, as it shows the inability of Democrats to have a realistic long-term fiscal strategy. Budget resolutions are useful not as legislative mechanisms, but as a symbolic document that explains a political party’s long-term spending goals and gives voters insight into how that party will govern.

Any budget in the current economic climate needs to confront the most pressing long-term reality of American spending – that entitlements are projected to drive the deficit into unprecedented territory. Avoiding the high interest rates, negative effects on growth, and crowding out of all non-entitlement spending that this deficit explosion will cause requires either stiff spending cuts or large tax increases. The Democrats budget would likely center deficit reduction around tax increases, but the long-term nature of a budget would demonstrate that tax increases on all Americans, not just “the rich,” would be needed to raise the revenues needed to offset ever increasing spending.

Politically, keeping Americans unaware of this reality is a wise move for Democrats, as it allows them to oppose spending cuts without having to support unpopular tax hikes. But as a matter of public policy, they are doing the country a disservice and are only making the eventual fiscal adjustments more painful through their sophistry. To their credit, the Republican Party has put their long-term approach to federal spending into print, in the so-called Path to Prosperity authored by Rep. Paul Ryan (R-Wisc.) and repeatedly passed by the House of Representatives. This budget is far from perfect, as it relies on phantom funds conjured up by unspecified tax loophole closings in order to claim revenue neutrality despite cutting tax rates, and also kowtows to senior citizens, a key Republican constituency, by ensuring that the entire burden of entitlement cuts falls on younger Americans. Despite these failings, the Ryan budget was honest and courageous, at least by Washington’s standards, and gave America a clear idea about how Republicans plan to tackle the deficit problem.

Many Republicans now doubtlessly wish they had mimicked the Democrat’s cowardice, as attacking the Ryan budget and its entitlement cuts was a centerpiece of President Obama’s re-election campaign. Republicans would attack a Democratic budget in much the same way, exaggerating it to a caricature of liberalism and then lambasting it as a giveaway to unions, trial lawyers, shiftless poor people, and other Republican bugbears. Even beyond Republican attacks, Democrats would incur political fallout from the internal process of agreeing on a budget. Divisions between moderates and liberals on issues ranging from desired tax rates, to  the acceptably of changes in Social Security’s cost-of-living adjustments, whether or not to allow caps on the mortgage tax deduction, and countless other policy questions, would be exposed in a messy internecine conflict. Currently, Senate Democrats are basically united around President Obama, and thus enjoy an advantage over the divided Republican Party. They are not likely to risk forfeiting the advantage of unity simply for the symbolism of a budget.

The breakdown of the budgeting process is ultimately just another manifestation of congressional dysfunction, with government revolving around endless partisan warfare, often revolving around meaningless wedge issues unrelated to America’s actual challenges, rather than engaging in serious debates over public policy. Like the Republicans’ abuse of the filibuster, the Democrats’ abandonment of the once routine budgeting frameworks shows how far the institution once known as “the world’s greatest deliberative body” has fallen.