Public concern over rising deficits is growing once again, but the prospects for Congress doing anything about them are negligible absent a major crisis. That was the consensus of a group of experts at a March 15 seminar on "Congress, Deficits and Public Opinion."
Carroll Doherty, associate director for the Pew Research Center for the People and the Press, reviewed the history of public polling on deficits, noting that at certain periods during the 1980s and 1990s, the deficit ranked among the top national concerns of the public. In 1990, for instance, 21 percent of the people ranked the deficit as their most important concern, and after the 1992 presidential debate between George H.W. Bush, Bill Clinton and Ross Perot, 51 percent of those polled identified Perot as the candidate best suited to manage the federal deficit. Nevertheless, Perot still lost to Clinton in the general election. Doherty observed that in 1994 and 2006, the party judged best able to handle the deficit gained control of Congress in the midterm elections—the Republicans in 1994 and the Democrats in 2006. "It's interesting and a little scary for Democrats, perhaps, that Republicans hold an identical lead today as the party better able to handle the deficit as they did in 1994," Doherty said. "I don't know if that serves as an omen or not." However, Doherty noted that the public today is split 47-47 percent over whether to cut the deficit or spend more on the recovery.
Scott Lilly, a senior fellow at the Center for American Progress and former staff director of the House Appropriations Committee, said the current deficit is running 10.6% of the Gross Domestic Product—the fifth worst deficit in the last 70 years. Even more alarming is the public debt level which is estimated to be 64 percent of GDP this year, "though it is a significantly lower percentage than most of our trading partners." Debt was dramatically larger in the immediate aftermath of World War II, said Lilly, but it declined significantly over the next 30 years as the economy expanded substantially. Lilly pointed out that the deficit is not dramatically affected by the economic recession or by the stimulus package, but rather by the retirement of the first wave of "Baby Boomers" that will spur huge increases in Social Security and Medicare spending. In explaining how the U.S. went from four years of surpluses in the late 1990s back to deficits in the first decade of the new century, Lilly said the surpluses were the product of economic growth that was 50 percent higher than the rate of growth in the previous eight years. A strong economy increased revenues, but so did Congerss with tax increases in 1993. By 2000, tax revenues were 20.6 percent of GDP whereas today they are less than 16 percent. Lilly said if we had maintained the higher level of revenues, the public debt today would be about $3 trillion smaller. "My point is that revenues have to be on the table," in addressing the deficit situation, Lilly concluded. "The "unwillingness of Republicans to even consider the president's cuts in Medicare provides little encouragement for meaningful entitlement reform," and entitlements are the main the source of our deficit problems.
G. William Hoagland, vice president for public policy at CIGNA, and former staff director of the Senate Budget Committee, said he was discouraged about chances for meaningful action on reducing deficits. "It will take a much higher authority than Congress to find a solution." Hoagland said public opinion polls are often conflicting on what the people want. "We want Washington to fix our problems now, but at the same time we want government to shrink, spend less, and reduce our taxes. We hate government in general, but love government in its particulars." Exacerbating this ambivalence are widening fiscal fault-lines and the inability of elected officials to address the public's concerns over jobs and the economy. Hoagland said he had some hope last year that something would be done, but the Senate turned back a bipartisan proposal by Budget Committee Chairman Kent Conrad (D-N.D.) and Judd Gregg (R-N.H.) to create a bipartisan task force on deficit reduction made up mainly of Members of Congress. Hoagland said the commission created by President Obama had less of a chance to succeed because it is less tied to Congress. "It is more a case of contracting-out our legislative responsibilities." Hoagland concluded that, "The political process is incapable of informing and reforming its fiscal situation until a crisis dictates immediate action." The "key to achieving the necessary conditions for fiscal reform" will involve "overcoming and unwinding the increasing polarization that has come to dominate the U.S. Congress."
Eric Pianin, Washington editor of The Fiscal Times, an online publication reporting on budget issues, said "There rare few assignments [for a journalist] that are more challenging, interesting and consequential than grappling with the budget deficit." Pianin, was previously a congressional correspondent for The Washington Post and coauthor with George Hager of, "Balancing Act," a book about the Gingrich-Clinton budget battles of the 1990s. He noted that whereas 20 years ago deficit concerns were seen more as a future problem, today that problem has arrived with the retirements of the "Baby Boomers" and rising entitlement expenditures. Nothing in the president's health care plan seems to bend the health care cost curve down significantly, he observed, and there is no question that health care costs are "the real driver" of rising deficits. Pianin lamented the mixed coverage of budget issues by the media, noting that 20 years ago there was more coverage of incremental steps in the budget process. One of the reasons deficits got more media attention then was that politicians like Clinton, Dole and Perot made budget matters seem consequential. "President George W. Bush never did, and we saw very little discussion of it in Obama's first year." Another reason the media is doing a poorer job of covering the budget and its impact is the decline in resources and good investigative reporting. "The public suspects the media of bias, and they often feel overwhelmed" by the conflicting reports they hear.
By Don Wolfensberger, Director, Congress Project, and Megan Sigovich, Research Assistant, United States Studies