Count the Congressional Budget Office as something of a referee, or dispassionate voice, in the battles of the federal budget, the latest episode playing out now and into next month. The budget office recently updated its projections for federal spending. Its tone and assessment contrast sharply with the overblown words of many Republicans on Capitol Hill suggesting the country faces an immediate spending crisis, requiring an attempt to leverage a higher debt ceiling into further spending reductions.
Federal spending has been declining steadily the past three years as a share of the gross domestic product. Half of federal spending covers the major health-care programs, Social Security and interest paid on the national debt. Health-care spending and our aging population promise big spending trouble for the long run, and eventually must be addressed. Yet, for the moment, annual increases in health spending have slowed significantly.
The rest of federal spending involves other entitlement programs, defense and discretionary spending. The budget office points out that this half has amounted historically to 11 percent of the overall economy. Now it is headed on a path to 7.6 percent in 2023 and 7.1 percent in 2038.
Ideally, Congress and the White House would use this time to start crafting a balanced approach to putting the country’s finances in order, the focus on compromise, on additional revenue and spending reductions for a decade ahead and beyond. Instead, House Republicans and U.S. Sen. Ted Cruz have opted for politics as protest, aiming to “defund” Obamacare when they know the threat is hollow. The new health-care regimen has been structured mostly to involve mandatory spending, and not annual discretionary appropriations.
On Thursday, Speaker John Boehner and his Republican caucus appeared to shift their tactics, less interested in threatening a government shutdown and more inclined to making the question of raising the debt ceiling the place to take a stand. They unveiled a proposal to attach a laundry list of conditions, all areas of contention with the Obama White Hose and Senate Democrats, from energy exploration on federal lands to blocking funding for the Consumer Financial Protection Bureau.
What Boehner and his allies again resist acknowledging is that the debt ceiling reflects spending decisions previously made. The step doesn’t trigger more spending or larger deficits.
Fail to raise the debt ceiling, and the country fails to pay its bills. That explains the anxiety and turmoil that would visit financial markets if the country defaulted, even for a short time. The speaker likes to assert that debt-ceiling increases long have been part of deficit-reduction packages. What he doesn’t admit is that in the past the package has come first, the debt-ceiling increase a perfunctory addition. His caucus is the first to use the moment as a vehicle for partisan extortion, or a dangerous and unnecessary play.