Time for Washington to get smart on the budget

3/10/2013

Portman

Ten days into the budget sequester, the Republic is still standing. Americans aren’t rioting, or dying, in the streets. The stock market is setting records.

So the big, automatic, brain-dead reductions in federal spending that the sequester is imposing must be no big deal, right? Not quite.

The partisan brinkmanship of the sequester suggests that not only can we not expect Congress and the White House to make things better on the big issues that confront this nation — climate change, immigration reform, sane firearms regulation — they can’t even figure out how to stop themselves from making things worse.

Too harsh? Ohio’s Republican senator, Rob Portman, says he remains convinced that Mr. Obama and lawmakers can yet reach agreement on a sensible, balanced, long-term plan to reduce the deficit that would replace the chain saw of the sequester.

“I’m the eternal optimist,” Senator Portman told me last week. “Of course, I actually thought the super-committee was for real too — and we came close.”

Let’s hope that Mr. Portman — a former federal budget director and one of the GOP lawmakers the President reached out to last week to try to jump-start the budget talks — is right. Dismiss Mr. Obama’s rhetoric on the sequester as scare tactics if you will, but its impact on Ohio is plenty scary.

The White House says that unless it’s overturned, the sequester will deprive Ohio of federal aid our state needs to educate tens of thousands of disadvantaged and disabled students this year, costing hundreds of teachers their jobs. Thousands more poor children won’t get Head Start classes or child care.

Almost 4,800 Ohio college students in Ohio may not get financial aid or work-study jobs they need to stay in school. About 26,000 civilian Defense Department employees in Ohio stand to lose $161.4 million in pay because of mandatory furloughs.

More than 5,000 children might not get needed vaccines. Some 4,200 Ohioans with substance abuse problems won’t be admitted to treatment programs. About 7,600 Ohioans won’t get tested for HIV. As many as 900 victims of domestic violence won’t get help.

Nearly 57,000 unemployed Ohioans would get less assistance with finding jobs and training. Others who have been out of work for more than six months will lose some jobless benefits. By some estimates, the sequester could cost Ohio 40,000 jobs over the next two years.

There also will be much less money to protect clean air and clean water and fish and wildlife, to provide meals to seniors. to prevent and prosecute crime, and to cope with threats to public health.

These changes aren’t taking effect all at once. Some may be delayed for months, or longer. But in the meantime, the sequester threatens economic recovery and job creation, which remain fragile in this region.

Describing the spending cuts as occurring across the board is misleading. They’re limited to defense and domestic programs that aren’t mandated. Much of the affected “discretionary” spending is on vital public investments and services.

The sequester mostly doesn’t touch the 60 percent of federal spending that goes to entitlement programs: Medicare, Medicaid, Social Security. That’s why its impact on the rest of the budget is so painful.

The debt solution is the same as it’s always been. The government needs to raise more revenue and to reduce and re-prioritize its spending — carefully, not mindlessly, and on entitlements as well as defense and domestic programs.

You can raise revenue by reforming the tax code, closing loopholes, and ending wasteful breaks that benefit the wealthiest Americans and corporations. But many Republican lawmakers, who grudgingly accepted tax increases to avoid the fiscal cliff in January, say they’re done talking about revenue.

From now on, they say, any effort to reduce the deficit and national debt must consist solely of spending cuts. Republicans repeat the cliché that Washington doesn’t have a revenue problem, it has a spending problem — even though the GOP-controlled House passed a budget resolution last week that at best will keep the government from shutting down this month, but otherwise does too little to set new spending priorities.

Unlike Tea Party extremists, Senator Portman says he’s willing to consider additional revenue, including reduction of tax preferences. He almost sounds like a Democrat when he concedes that “we can’t cut our way to a solution ... the sequester is the wrong way to achieve savings.”

But he insists that any revenue increases must occur in the context of comprehensive individual and corporate tax reform that cuts tax rates and stimulates economic growth and job creation. And he says new revenue must be accompanied by meaningful changes to what he calls “unsustainable” entitlement programs.

It’s possible, if not easy, to limit entitlement spending without afflicting its poorest and neediest recipients. It probably isn’t possible to tame entitlement spending without causing middle-class Americans some discomfort, since that’s where most of the spending occurs. So when President Obama promises that his budget plan “won’t stick the middle class with the bill,” he’s at least mildly disingenuous.

Senator Portman notes that even though Mr. Obama has just started his second term and the new Congress has just taken office, the window of opportunity to make a budget deal could close within months.

“Presidents tend to do better in the first two years” of their final terms, he says. “It’s time to do it — if we don’t do it now, it will be much more difficult in an election year.”

Mr. Portman won’t divulge what he and the President talked about last week. But he adds that he was “encouraged” by their conversation.

“I hope he’s sincere,” Mr. Portman says. “He doesn’t want to leave a legacy of adding as much to the debt as all the previous presidents. More governing and less campaigning is the way to do it. All of us need to be smart.

“This is a great opportunity for the country, and a great opportunity for [the President]. The stars are aligning for us to take advantage of it. That’s where I get some hope.”

David Kushma is editor of The Blade.

Contact him at:dkushma@theblade.com