Deficit Expert: 'We Shouldn't Give Up Balancing The Budget'
ROBERT SIEGEL, host:
Isabel Sawhill, senior fellow of the economics program at the Brookings Institution, recently invoked the memory of the late Senator Daniel Patrick Moynihan when she wrote about the federal deficit. Moynihan spoke of defining deviancy down, or a willingness to accept ever lower norms of social behavior. Sawhill wrote about defining deficits down. Isabel Sawhill, welcome to the program.
Dr. ISABEL SAWHILL (Senior Fellow and Director, Brookings Institution Economics Program): Thank you. Nice to be here.
SIEGEL: And I suppose your point is that as the years have gone by, our tolerance for federal budget deficits, and for programs that don't reduce them, has grown.
Dr. SAWHILL: That's exactly my point. And of course, it's very difficult when you have a deficit that is currently around $1.6 trillion and more importantly projected to be somewhere in the neighborhood of 8 or 9 trillion over the next decade. It's hard to have ambitious goals, but I think we shouldn't give up on the idea, which is a very old idea, that we should try to balance our budget. Just as a family tries to bring their income and their outgo in line with each other, so should the federal government.
SIEGEL: Is it fair to observe here that when people talk about having to raise taxes somewhat to close the deficit gap, Republicans won't hear of it and when you talk about, say, cutting entitlement spending in order to close the gap, Democrats won't hear of it? Is that a relatively accurate description of the logjam we're in?
Dr. SAWHILL: That is absolutely accurate. Republicans don't want taxes on the table, and Democrats are reluctant to see entitlements cut unless Republicans will meet them halfway on taxes.
SIEGEL: When you run the numbers, can you, by saying in the future people will expect a little bit less in their Social Security checks, a little bit less of a benefit for Medicare and perhaps tax rates will go up by little bit for people with high incomes, by doing that sort of adjustment, do you actually come out with a balanced budget anytime soon?
Dr. SAWHILL: It would take a while. You couldn't do it overnight, and you shouldn't try to do it overnight. After all, we are in a recession, and we may stay there for a while. And so I'm not advocating that we cut the existing deficit this year. I am advocating that we legislate, right now, some measures that will slow the growth of spending over time and raise revenues over time. And if we do it now, it can be less painful and more feasible than if we continue to kick the can down the road, so to speak.
SIEGEL: You've been watching this process for some time. Nowadays, it's very common for people to tell you, I'm really concerned about the economy we're leaving to our children. And how do you understand the loss of traction for addressing the budget deficit over the years? Is it just a feature of the recession right now? Is it the boredom of the Washington press corps and paying enough attention to it? How do you understand the defining, the deficits down that you've observed?
Dr. SAWHILL: Well, I think it does go to some of the problems in political life right now. I, along with a group of others, have spent a lot of time over the last few years going around the country, giving talks to ordinary citizens about the fiscal future we face. And we find that the public is very concerned about the issue and that they get it, they want something done. The problem has been that most of the people who must take action need to get themselves re-elected - or want to get themselves re-elected. And it's very hard to get re-elected if you have cut spending or raised taxes. So, the problem basically is a lack of political will.
SIEGEL: I've seen the same audiences, when they're told about what the deficits look like, how they've been growing and what ought to be done, there's enthusiasm for addressing these problems. I mean, there seems to be some disconnect between - at least what people say they want Washington to do and the message that politicians you say they lack the will, but it seems to be what they've measured in the way of real public sentiment as to what people really want to see done.
Dr. SAWHILL: Well, of course, the public hasn't been well-educated on these issues and, of course, we've gotten away with running large deficits for a number of years now, and nothing terrible has happened. So people say to themselves, well, we might as well just keep borrowing. So I don't want to imply it's easy to get the public to focus on this. But let's go back to 1992, when Ross Perot was running for president, and he focused on this issue like a laser beam, and he got 19 percent of the vote. And when Clinton was elected because of the Perot showing in the election, Clinton felt he needed to focus on the deficit. So by the year 2000, we were actually running surpluses in the federal budget.
SIEGEL: Of course, the way the Democrats would also recall that is that along the way, they were ousted from virtually every majority they enjoyed in 1994. And so I'm not entirely clear that the political payoff was appreciated by Democrats when Bill Clinton became a deficit hawk.
Dr. SAWHILL: I think that's a good point. There may be a political price to pay. We have our current president saying that he'd rather be a good one-term president than a - OK two-term president. And maybe someone needs to fall on their sword on this issue for the benefit of the longer-term strength of this country.
SIEGEL: Dr. Sawhill, thank you very much for talking with us once again.
Dr. SAWHILL: Thank you for having me.
SIEGEL: That's Isabel Sawhill, senior fellow in the economics program at the Brookings Institution in Washington, D.C.