All the self righteous howling about out-of-control deficits notwithstanding, we should all utter a silent prayer of thanks that when it came to saving the economy from the abyss in 2008 and 2009, saner elements of both parties – including presidents Bush and Obama, their Treasury secretaries and the chairman of the Fed – borrowed trillions to stave off disaster, and the heck with how big the deficits got.
We’ll never be able to prove how horrific things would have been had they not done that, since, of course, the catastrophe never happened. So critics are free to rant about how irresponsible it was to make deficits so big. Maybe they go home after a day of this and utter a silent prayer of thanks as well. They should.
But let’s move on. With the economy clinging to a modest but persistent recovery but the national debt still growing at a frightening rate, it's time to start being much more careful about borrowing money. The Office of Management and Budget projections show the debt held by the public headed to almost 80 percent of the Gross Domestic Product for the first time since 1950, when the nation was emerging from a real economic abyss and a global war. We're not Greece yet, not even close. But the bond vigilantes who drive up interest rates for countries that can't handle their fiscal affairs are on the prowl, and the U.S. federal debt is starting to look pretty profligate.
Which brings us to the American Jobs and Closing Tax Loopholes Act of 2010, which sponsors would like to pass this week, before Congress takes its Memorial Day recess.
The AJCTLA is a typical congressional Christmas Tree – expensive and full of lots of unrelated stuff that got thrown in there because this is a must-move bill. There's an extension of unemployment benefits and the COBRA health insurance subsidy for the unemployed, the so-called Medicare doc fix, extensions of expiring tax provisions, infrastructure incentives, etc. The total cost, the Congressional Budget Office says, is $174 billion over 10 years. A fight has broken out over whether it should be paid for, or borrowed for.
It’s time to start paying for measures like this. So far, congressional Democrats have raised only 23 percent of the cost of the $174 billion bill, all with about $40 billion in tax increases. Much of the rest would be written off as "emergency spending" exempt from pay-fors. In other words, backers of the bill are fine with adding another $134 billion to the debt. And they're apparently unable to find any spending anywhere they might cut to help offset the new spending in this bill, even over the long haul.
Please. This might have been OK when the nation was staring into the void, but it's impossible to justify now. Can proponents really say "emergency" with a straight face? The only "emergency" about the most expensive item in the bill -- the $85 billion doc fix -- is that Congress has waited until the last minute to fix it. Without action, Medicare reimbursement rates for doctors will drop about 21 percent next Tuesday. Will doctors who already feel pinched by Medicare pay rates cut back on Medicare patients? Um, yeah. Could Congress have seen this coming months or years ago, and planned for it? Um, yeah.
The doc fix isn't the only piece of spending that's more a political emergency than a real one. The bill would provide $4.6 billion to settle class action suits by African-American farmers and Indian tribes. Worthy spending, but if they're important, why shouldn't these be paid for by cutting something else? Ditto $1 billion for a summer jobs program for people 16 to 21, and another $1 billion so the National Housing Trust Fund can build, preserve and rehab low-income rental homes.
At a time when the unemployment rate is 9.9 percent and people who lose jobs are likely to be without work for record periods, there's certainly a case to be made for extending unemployment benefits and the COBRA health insurance subsidy to the end of this year. But it's time to start paying for this, and if it would harm the recovery to pay for it right away, why not lock in payments over the next five years?
Budgeting is about choices, and as long as Congress can keep putting new spending on the tab, members don't have to weigh priorities and decide which ones are really important. That's unsustainable.
This week's bills, which also include a Senate proposal to spend another $45.4 billion in borrowed money to send more troops to Afghanistan, are just a small warm up for what Congress will have to do if it's serious about really getting the deficit under control. This week it's billions -- that will be about trillions, and it will have to go to places such as Social Security, defense, Medicare and substantial taxes.
Does anyone seriously think Congress will be able to do that if it can't even do something as comparatively puny as this?
George Hager is a member of the USA Today editorial board.
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