You don't have to be Steve Forbes to know what Congress and the president should do to steady the federal budget. Still, it was nice to hear the president and CEO of Forbes tell bankers in Salt Lake City last week what many people know. Tax reform, entitlement reform and a stronger dollar are the necessary ingredients for a full recovery.
About the time he was speaking at a Zions Bank luncheon, House Speaker John Boehner was presiding over a spending-cut marathon to cut up to $100 billion from the budget President Barack Obama submitted to Congress. All of those cuts, however, would come from discretionary spending, which makes up a small part of the total budget.
Meanwhile, former House speaker and current minority leader Nancy Pelosi told a gathering of the chiefs of staff of Democratic lawmakers to expect a government shutdown later this year because of an impasse over the budget.
If lawmakers dig in their heels and shut the government down over discretionary spending, that would be a scene from a theater of the absurd. To put it in everyday, domestic terms, it would be like arguing over who is going to vacuum an upstairs bedroom when the basement is flooded and the water is rising.
Presidents' Day is a good time to admire leadership, which often gets defined as making tough choices and leading an unpopular, but correct, path through difficult times. While the current situation may not seem as bad as at it was during the last two years, the nation still has a budgetary trajectory pointed straight at disaster, and it isn't going to change much with arguments over discretionary spending.
The three big entitlements — Social Security, Medicaid and Medicare — grow of their own accord and now devour just about all federal tax revenues. That was the bold message of the president's own deficit commission. Add in enormous military outlays and the federal budget problem becomes crystal clear.
Forbes said reforms to make these programs solvent, together with reforms to the incredibly convoluted tax system that vexes all working Americans this time of year and efforts to strengthen the dollar (primarily through not printing so many of them), would help the economy go from its current 35 mph pace "back to 70 miles per hour." Yet no one in Washington, from the president on down to leaders of both parties, seems to want to talk seriously about this.
Back in 1995, a Republican-controlled Congress did shut down the government over budget disagreements. The GOP was widely viewed as having lost that battle, at least on the PR front. History doesn't have to repeat itself, but if Republicans shut things down without pushing for reforms to entitlements and military spending, people would be right to view the effort as little more than meaningless politics.