The recent agreement to reopen the federal government called for a congressional conference committee to bridge differences, crafting a budget deal that would avoid another costly and unnecessary confrontation. The lawmakers met for the first time last week, and one member, U.S. Sen. Rob Portman, described the session as “encouraging in some ways,” the participants looking to stay away from a government shutdown and “do something to move the country forward.”
For the Ohio Republican, that means addressing “the spending issue.” What he wants, as he told reporters last week, is to take action “regarding the rising debt that has a negative impact on this economy, makes it tougher to bring jobs back.”
As Portman knows well, this panel won’t be pursuing some far-reaching “grand bargain.” It has a federal budget to frame, and one leading priority should involve spending. The sequester is an exercise in fiscal foolishness, a meat-ax applied to a small yet important range of spending, among the victims, the National Institutes of Health, disaster relief and special education. There should be a ready deal for ending, or at least easing, the sequester, in exchange for spending reductions aimed at those programs actually driving the deficit, particularly in the area of health care.
Ideally, a federal budget plan would include a balance of new revenues and spending reductions — all aimed at the longer term, after the economy has gained sufficient momentum.
For the moment, and contrary to what Portman and others suggest, a gusher of spending isn’t what is holding back the economy, or making it tougher to bring back jobs. As Mark Zandi, the chief economist at Moody’s Analytics, noted on this page on Monday, reductions in spending, such as the sequester, have slowed down the recovery, dampening growth and job creation.
Clearly, the country must confront its debt and spending problems. Of immediate concern should be the jobs deficit, the nation 1.3 million jobs short of where it stood before the harsh recession. Government spending on public works, research, education and other leading priorities can help make up for lagging demand in the private sector. Pair such a healthy injection with spending reductions for the long term, and the country would be in a stronger position — sooner and later.
Unfortunately, such a bargain won’t happen, either, leaving room for what rates as realistic and encouraging in today’s Washington, a budget deal by the middle of December that brings relief from the sequester and avoids another trip to the brink.