Robert J. Samuelson: Budget deal ignores real issue

The budget package crafted by Democratic Sen. Patty Murray and Republican Rep. Paul Ryan – heads of the Senate and House budget committees – recalls political scientist Charles E. Lindblom’s famous 1959 essay, “The Science of ‘Muddling Through.’ ” Wrote Lindblom: “Democracies change their policies almost entirely through incremental adjustments. Policy does not move in leaps and bounds.” People stick with what they know. Transformational (“non-incremental”) changes are usually “politically impossible” and, when they’re not, are “unpredictable in their consequences.”

More than a half-century later, Lindblom’s insights endure. Just look around. Obamacare demonstrates the perils of transformational policies – their unpredictability. And the Murray-Ryan accord is a triumph of incrementalism, aka “muddling through.” OK, let’s acknowledge their accomplishment. The agreement beats the alternative, which might be another senseless government “shutdown.” But the price of peace is doing almost nothing about our long-term budget problems.

Recall: The central issue is the mismatch between government’s spending promises and its willingness to tax. Although the Great Recession hurt, it’s not the crux of the matter. From 1973 to 2012, the budget was in surplus only four years. During this period, spending averaged 21 percent of the economy (gross domestic product) and taxes 18 percent. Retiring baby boomers are now raising Social Security and Medicare spending and – if nothing is done – deficits.

But do what? Democrats won’t cut retiree benefits; Republicans reject tax increases. The rest of the budget (the 36 percent that includes defense and “discretionary” programs such as the FBI, school lunches and environmental regulation) has borne most cuts. In 2011, the Budget Control Act reduced this spending by imposing annual caps. When Congress couldn’t agree on further changes, it triggered “sequestration”: automatic cuts to the same spending.

Now Congress can’t stomach sequestration. Republicans worry that the military is being savaged. Democrats fear that domestic programs are being gutted.

The Murray-Ryan plan aims to relieve this sequestration misery by increasing authorized spending, split between defense and nondefense programs. To pay for the increases, the plan would, among other things, lower pension benefits for federal workers and military retirees and raise fees for airport security.

The claim that the package would provide a small amount of deficit reduction over a decade is dubious; most of the reduction occurs in 2022 and 2023 and reflects assumptions that can be instantly reversed. The broader message is that annual deficits would continue indefinitely.

All this is in the best tradition of muddling. Hardly anyone wants to confront truly difficult questions. How big a government do we want? What groups or causes deserve help? Which don’t? How high can taxes go without harming the economy? For decades, Congress and presidents have dodged these and other hard issues through chronic and expedient deficits. Rhetoric aside, they’re staying with what they know, as Lindblom foretold.

But there’s a problem. Lindblom’s common-sense insight has a giant exception: crises. Change, forced by outside events, then happens by “leaps and bounds.” The recent financial crisis caused Congress and two presidents to embrace measures (the rescue of big banks, General Motors and Chrysler) that were unthinkable a few months earlier. In the 1960s, civil rights demonstrations pushed Congress to pass the Civil Rights Act of 1964 that, outlawing most public racial discrimination, wasn’t “incremental.” History offers other examples, including the Civil War, the New Deal and both World Wars. Small changes won’t suffice when big changes are required.

On the budget, muddling through comes with a crucial assumption. It is that continuous deficits won’t provoke a crisis that compels political leaders to take harsh steps that they would otherwise not take. This optimism may be justified. For decades, “experts” have warned of the dire consequences of unchecked deficits. Yet, no great crisis has occurred. But this conviction could also be complacency. Government debt is in territory that, except for wartime debt, is unprecedented. We don’t know the consequences. Someday, we may no longer have the luxury of muddling through.