Broken GovernmentPosted: November 28, 2008 Filed under: Columns, Taxes and Budget Leave a comment »
The Obama Administration faces not one but several dilemmas. First is the huge issue of preventing the current downturn from turning into a very deep and long-lasting worldwide recession. State governors are running to Washington for help with their own budget crises, while Democratic supporters are clamoring for the spending increases and tax cuts they were promised during the campaign. Unfortunately, the long-term federal budget is so unbalanced that even if the nation were experiencing good times, able to avoid more tax cuts or spending increases, and in a position to enact the types of budget reforms that President Clinton did in 1993, it would still be way behind the fiscal eight-ball.
That’s just the money side of the equation. Many government programs are in disarray: they cannot be administered as currently structured, and cannot prove or measure their effectiveness. Many were designed for a different era but retain strong constituencies opposed to change. Yet few elected officials have ever undertaken systemic reform of any major program (I don’t count simply raising benefits or lowering taxes as systemic reform). And not for a very long time has Congress seriously weighed significant legislation that asks citizens to make even a modest sacrifice.
There is one way, and probably only one way, to confront these issues. President Obama must treat them as symptomatic of an even larger problem—that government is broken. As one of his very first actions, he should convey to the nation that these problems permeate government from top to bottom, that we are going to need multiple reforms, and that tackling them will take hard work and often shared sacrifice for the common good. This would not be an attack on government but an attempt to restore confidence in it.
He must then propose a series of processes—actual proposals for quick enactment in some cases, commissions and white papers in others, and complete departmental reviews in yet others. These will lead, he must promise, to a series of proposed reforms and definite proposals—a few immediate, but others after a fuller assessment of the issues.
Simultaneously, he must get Congress on board—not just to vote for a stimulus but to figure out how it can organize to deal with the inevitable: asking the public to give something back. Most of today’s representatives have never had to do this!
Here’s what is going on among Obama’s advisors right now. The dilemmas the new Administration faces—I have only mentioned a few—are voluminous. They have led to fierce internal struggles to determine what its all-important first message to the nation might be. Anytime someone suggests picking one, multiple advisors offer sound reasons why it should be another.
I think it would be a drastic mistake to pick only one of these battles to fight, no matter how important it might be viewed in isolation. I know there are those who suggest trying only for the easier first victory—generally on the give-away side of the budget (tax cuts or spending increases)—and gradually picking up momentum. And certainly fiscal stimulus in isolation fits that bill. That approach looks good at first because it allows the President to hold onto the popularity that comes from continuing to be a Santa Claus who doesn’t really ask for much.
Unfortunately, that type of thinking has put us in the mess we are in today, and it really doesn’t work well for a President over a four- or eight-year cycle, anyway. Look at President George W. Bush’s popularity rating after presiding over some of the largest give-aways on both the tax and spending side of the budget in our nation’s history. Even if this approach has worked in the past, it’s like proposing to run at 5 miles an hour on a treadmill that is running backward at 20.
In dealing with the most pressing issue, the recession, the President will of course need to support some tax cuts and spending increases. However, he must not let those easier political tasks take him away from his larger task of starting to fix this broken government. For instance, he should indicate that he wants to tackle not simply the effects of the recession but some of its causes, so that the same mistakes are not repeated again.
I also suggest that the President avoid getting into the weeds on these issues. He should boldly empower others to draft the proposals, conveying in each area a few broad goals that he wants to achieve. He could even empower some independent, nonprofit, or nonpartisan groups to keep an eye out as to whether the process, especially as it winds to and through Congress, strays too far from broad principles to be followed.
Remember that both Clinton health care reform and Bush Social Security reform failed in many ways because those Presidents were too engaged, made too many political decisions that went against what was technically achievable, and tried to wiggle their way around dilemmas for which there were no easy answers. Contrast their “success,” if you will, with that of tax reform in 1986, where the Treasury led the way despite a lot of sniping from the White House personnel, or with Social Security reform in 1983, where President Ronald Reagan generally stood behind the commission’s recommendations, some of which violated stands he had taken earlier in his career (e.g., taxation of Social Security benefits). The President’s role is to keep his—and our—eyes on the prize.
Consider the alternative. The President expends a lot of chits getting behind some stimulus or energy reform or health care reform or infrastructure investment. He lets the other matters slide. But some of these ideas don’t work, or aren’t sufficient, or face huge opposition. The recession continues or is followed by slow growth, the energy proposals end up distributing a lot of benefits and costs unfairly because property rights to pollute and taxes are hard to allocate, the health care reform doesn’t meet all expectations, and the infrastructure investment is allocated by Congress in a way that overlooks too many dangerous bridges or levies.
If the President is viewed as in charge of the naval force that is trying to turn the tide of battle, people will forgive him when his captains make mistakes. If he starts taking charge of each of his battleships and cruisers, trying to claim success for every maneuver, he will never gain full command of the fleet or gain the full confidence of a public counting on him to lead.