The Three Budget Debates

Since the mid-1990s I have dropped in and out of the federal budget debate, the politics of the federal budget, and citizen engagement in the federal budget. The substance of that debate is largely the same today as it was when President Clinton was in office (one notable difference being that the government was running annual budget surpluses and paying down the federal debt in the late-1990s). The long-term solvency of entitlements remains largely unaddressed, domestic discretionary spending continues to get squeezed, and interest payments on the federal debt continue to grow.

One reason for this lack of progress is that America’s federal budget debate is, arguably, really three different debates happening simultaneously. The first is a debate about budget math, the second is a philosophical debate about the size and role government, and the third uses the budget as a proxy for general anxiety and anger at government.

Debate 1: MATH
The first debate is about math: the federal government ought not to spend more than it makes over the long term. Short term deficits are fine as long as those deficits are to produce long term gains, and surpluses are fine as long as they are a means to a stable economy rather than an end in themselves. Washington-based budget groups like the Concord Coalition, the Center for Budget and Policy Priorities, and the Committee for a Responsible Federal Budget tend to inform this debate. Leaders of these groups have their political views, but they share a pragmatic approach to politics and policy, and all three are well-respected by the policy elites and those who write about the federal budget.

Debate 2: PHILOSOPHY
The second debate is about philosophy: the point of the state and the limits of individual freedom in the context of society. The Cato Institute and Democratic Socialists of America are founded on the principles of individual freedom (Cato) and social responsibility (DSA). For these groups the budget is a result of the premise of the argument for government. If smaller governments and greater individual freedoms are good, the federal budget should probably be smaller; if greater social responsibility and social equality are good, the federal budget should probably be larger.

Debate 3: PROXY DEBATE
The final debate is the one in which most Americans participate when they talk about the federal budget, the budget as a proxy for their feelings about government in general. The budget debate isn’t about the budget, but rather about people’s feelings about President Obama, their own financial security, social norms, and a host of other things. These are the folks who talk about all the money the government spends on foreign aid and “waste, fraud, and abuse.” The anxieties expressed are real, and some of the policy ideas are sound (there’s not a huge pro-waste, fraud, and abuse movement), but ultimately the debate isn’t about the budget, the budget is a place to locate or articulate other concerns.

Because everyone uses the term “federal budget” (and the related “budget deficit” and “federal debt”) language everyone behaves as if they’re talking about the same thing, and everyone wonders why the others “just don’t get it.” Reporters and columnists who write about Congress tend to rely on the budget as math crowd, reporters and columnists who write about politics and campaigns tend to rely on the budget as proxy crowd, and almost no one in the mainstream media writes about the relative merits of our political system.

A problem is that the solution to the debate – how much the federal government should tax and spend and on who and what – is the single bill of the federal budget. There is one “thing in itself” in the form of the federal budget that is seen as being three different things by important participants in the debate. It should therefore not be surprising that the debate is stuck.

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