Back Channels: Now's the time for adult conversation on budget

PAUL LACHINE / newsart.com
PAUL LACHINE / newsart.com
Posted: May 22, 2011

Last month, after Rep. Paul Ryan (R., Wis.) released his plan to balance the budget, reform the tax code, and put Medicare on the path to solvency, he was invited to the White House.

President Obama, whose own first stab at a 2012 budget had completely overlooked the nation's spending and deficit problems, appeared ready to present a new and improved version. After all, the president himself had called for an "adult conversation" on these issues.

Ryan graciously accepted and was seated up front, just a few feet from the presidential lectern.

And then Obama tore into Ryan and his "Path to Prosperity" plan: It would cause "50 million Americans . . . to lose their health insurance"; it would replace Medicare and leave "seniors at the mercy of the insurance industry"; "poor children," "children with autism," and "kids with disabilities" would have to "fend for themselves."

The blindsided Ryan later called the speech "excessively partisan, dramatically inaccurate, and hopelessly inadequate to address our fiscal crisis."

The nonpartisan Factcheck.org agreed in part, saying the "50 million" line was based on "speculation and assumptions." And the hyperbole about seniors and children were both termed an "exaggeration."

"When the president is ready to get serious about confronting this challenge," Ryan said last month, "we'll be here."

So far, though, neither the White House nor most congressional Democrats have shown themselves ready to leave the kids' table. There's still time, but the moment for action is passing.

That was the message Sen. Pat Toomey delivered last week, both at a Federalist Society lunch in Philadelphia and at the American Enterprise Institute in Washington.

Washington had already missed two chances this year to get serious about deficits and spending, Toomey told both gatherings: the 2011 continuing resolution and the 2012 budget.

That resolution produced some baby steps on spending cuts but with even those called "draconian" by Democrats, it seems unlikely they'll follow through on the $4 trillion in savings over 10 years advocated by the president's own fiscal commission.

On the budget, don't look for the Senate to pass either the Ryan or the Obama plan. Or even Toomey's recent addition to the mix. He calls for balancing the budget by 2020; lowering spending to its 60-year average, about 18.5 percent of GDP (from the current 23 percent); and reducing publicly held debt to about 52 percent of GDP by 2021 (it's heading for 70 percent by year's end, and shooting for 100 percent).

Toomey said he supported Ryan but believes it's important for Washington to show it's serious about the looming fiscal crisis even sooner than the Wisconsin lawmaker suggests. Disagree or not, at least he and Ryan are doing their jobs. Senate Democrats haven't passed a budget in two years - and seem disinclined to pass one anytime soon.

Which leads to the third shot - perhaps the last for this year or this Congress - at getting serious on the deficit and debt: the vote to lift the debt ceiling.

Toomey says he would vote to raise the limit but only if there are real cuts in 2012 and only if there are tough, statutory spending caps in place. He'd also like a balanced-budget amendment but understands that's a long-term project.

"I think we need to insist right now - not next year, not in the near future, but now - for immediate spending cuts, for real reforms for a broken and dysfunctional process that got us here, and only then should we consider raising the debt limit," he said at AEI.

He dismisses the charge that linking the debt limit to spending cuts could lead to default.

"Categorically, absolutely false," he says.

If the limit were not increased, he said, the Treasury would have more than enough revenue to pay interest on the debt. Thus there is no need to default or even threaten to default - and the White House should make this clear to ease any market or creditor concerns. Shifting revenues to debt payments from other programs or agencies could cause problems, perhaps layoffs or a partial government shutdown. But Toomey isn't advocating this course, merely pointing out that the administration's debt-limit doomsday scenario is overblown.

Remember, too, that this is all avoidable. The administration just needs to stop demagoguing and join that adult conversation.

"We need to do this now," Toomey says. "I would also stress that I'm very confident that it's not too late to right this ship; it's not too late to get on a sustainable course, but my intuition is that the window of opportunity is closing."


Contact Kevin Ferris at 215-854-5305 or kf@phillynews.com.

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