Behind the Fiscal Cliff Looms Deficit Mountain
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The Fiscal Times
August 9, 2012

In poll after poll this year, voters consistently say that the economy and jobs are the biggest issues of the 2012 election. The distant second-place finishers are usually annual federal deficits and the national debt, which has grown by more than a trillion dollars a year for the last four years.  These issues are all interrelated and critical for the near- and long-term health of our nation, very much worthy of a detailed, principled debate.

So what issues have dominated the media’s attention the last few weeks?  Chick-fil-A, same-sex marriage, and Mitt Romney’s tax returns from a decade ago.  Great job, media folks!

In defense of the media, there are some mitigating factors for this lack of sensible and honest debate on the economy.   We’re still in the traditional dog days of summer.  Campaigns operate on the assumption that no one pays much attention to presidential elections until the conventions, after which the big arguments get made.  That may be less true in the Internet era than previous to it, but most operatives still want to save their ammunition for the last quarter of the game when it will score the most points.

The biggest problems, though, are the candidates and the political parties themselves.  The issues that voters want to discuss are broad, complicated, and far-reaching.  So far, though, the response from both sides only nibbles at well-chewed edges of the core issues, with no one seemingly capable of framing a larger debate over the vision for America’s economy for the next several decades.  One side talks about tax burdens, the other about fairness, and so far neither has given voters a comprehensive plan for solving this interlocking puzzle.

This is especially true in two critical areas.  The most acute is the defense sequestration that will take place at the end of the year.  Defense contractors have already begun planning layoffs in anticipation of massive funding cuts.  Republicans have demanded action to redo the cuts to which they agreed in 2011’s budget agreement to avoid job losses in an already declining economy.  Democrats insist that the cuts need to take place for deficit control. 

However, both sides miss the point.  The Department of Defense does not exist to be a jobs program, nor a deficit control point in and of itself.  The mission of the DoD and other security agencies is to fulfill the national security mission it receives from Congress and the President.  Its budget should reflect what is necessary to carry out that mission.  If we don’t have the money for the mission, then we need to change the mission and budget accordingly.  Both sides, though, avoid discussion of the American military/security mission, except for Defense SecretaryLeon Panetta, who has now repeatedly warned that the sequestration cuts on top of earlier reductions will leave the DoD much less likely to carry out its mission. 

The same problem exists in the rapidly-approaching entitlement crisis. With only a couple of exceptions (Rep. Paul Ryan being one), no one wants to talk about matching the resources to the mission of our entitlement programs, or even what the mission should be.  Do we want a retirement system – Medicare and Social Security combined – that exists to support people who truly can no longer work to support themselves, or do we want to support Americans for the 20+ years they’ll likely live after age 65 regardless of their potential productivity? 

If we want people to work longer, then we can take some common-sense steps to limit access, raise the age of retirement, and drive costs down with some privatization.  If we want to subsidize seniors for two decades, then we will need to raise taxes significantly to cover that cost.  What we cannot do is provide the latter with the resources of the former, which is what both sides have been trying to sell, usually by insisting that “waste, fraud, and abuse” amounts to the entire $100-trillion-plus unfunded-liabilities juggernaut breathing down our necks.

Most absurdly, we have both sides claiming to have a plan to pay down the national debt – what we owe already, before the entitlement crisis hits.  Republicans want tax reform that will be revenue neutral while promising unspecified spending reductions.  Democrats want to raise taxes on those making more than $250,000 a year as a “balanced” approach to deficit reduction.  Those taxes will raise no more than $80 billion in a year.  That only eliminates 8% of the debt we add each year, which makes it painfully clear that gimmicky tax increases won't solve the problem.

Taxes at the federal level are designed to produce the income necessary for the mission of the US government.  Spending directly relates to the mission.  We need to know the scope and size of the mission before we can determine spending and the appropriate level of taxation.  Do we want the federal government to have plenary jurisdiction in all areas of our lives, where it dictates personal choices and overrides religious objections in the name of the greater good?  We have been traveling along those lines for decades, but still provide funding for only about 60 percent of the annual costs for such a mission.  Do we want a federal government that only absorbs 20 percent of GDP?  Then we need to rest the mission to keep the costs within those boundaries.

What has been missing from the political campaign this year, and truly every cycle since Ronald Reagan’s midterm election, is an honest debate over the mission and resources of the federal government and its component parts.  That is almost certainly by design, since most politicians would be afraid to stand on a comprehensive platform that would immediately alienate a large section of the electorate.  Instead, politicians will tell voters that we don’t need to make tough choices, and end up kicking the can down the road.  Unfortunately, we’re running out of road, and we’re almost at the dead end.  Voters want to know how the candidates proposing turning around, and instead, both sides are arguing about the size of the curbs.

Reagan proved in 1980 and 1984 that a politician can win on a broad platform that clearly defines mission, scope, and resources.  Not only do we need that kind of debate now more than ever, the success of self-government relies on our ability to reward that kind of engagement.  If we cannot have an honest debate on the nature of government, the “fiscal cliff” won’t be the only cliff over which we’ll fall.

Political analyst Edward Morrissey has been writing and blogging since 2003. He is also a senior editor at Hot Air, part of the Townhall/Hot Air group of conservative publications, and hosts a weekly radio show in Minnesota.