This week on Facing the Future, we heard from Eugene Steuerle of the Urban Institute on why Zombies are in control of the federal budget and what must be done to break their grip on the future. Concord Coalition Chief Economist Steve Robinson joined the conversation.
In a new book, “Beyond Zombie Rule: Reclaiming Fiscal Sanity In A Broken Congress,” Steuerle updates an earlier book with a similarly chilling title, Dead Men Ruling. The main theme of both books is that too much of the federal budget has been predetermined by spending and tax decisions made long ago, leaving today’s policymakers and future generations with limited flexibility to make their own decisions.
“The Zombies are essentially what’s built into the budget in terms of mandatory spending, interest costs on the debt, and other factors that are going to be rising. There’s almost no freedom for members of Congress to do anything new without either cutting back on something else they’ve promised or increasing the deficit,” Steuerle explained.
To illustrate the point Steuerle has developed a fiscal democracy index. “It’s what share of revenues are left after you account for things that Congress has to do already because of mandatory spending and interest on the debt, barring new legislation. And it’s basically got down to zero,” he said. “All our revenues are committed, and it gets worse. All future revenues, which grow in the future, are also committed by this growth in mandatory spending and interest on the debt.”
According to Steuerle, this “explains why Congress is tied into such a knot. Basically, they’re tied themselves in a fiscal straitjacket, and they can’t get out of it without reneging on promises they’ve made to the public.”
He said his book is an appeal to Congress “that they recognize how little control they have, whether they want to cut taxes more, or they want to increase spending more, how little they are actually doing relative to what had already been built in. It’s not just the American public losing out in terms of getting a badly allocated budget, Congress is losing out in terms of their own control over what we do as a nation.”
“We have to have a focus on the long term,” Steuerle said. “We’re squeezing what we do for the young. We’re squeezing what we do for the working class. You don’t think that’s reflected in the votes and the changing voting patterns over time? Then you’re crazy. So we have to be able to show to the public how we’re going to actually make things better. But it’s not going to be next year. Basically, we need to show some long-term gains.”
“The real dilemma is making the transition,” he continued. “It may be like the Paul Volcker type of transition on monetary policy, and that’s the tough political issue. But if you think about it, once we make the transition, we go back to a normal world where there’s not so much pre-committed. Revenues automatically rise with economic growth. They rise faster than automatic growth in spending. And at that point Congress’ job is to give away money. They could do tax cuts, they could do spending increases. And the reason for that is that you don’t want a hugely rising surplus, either, because that would create a drag on the economy. And that’s what we had for most of our history until again the recent decades. So that’s the world we’ve got to get to. But once you’re in that world, hen Congress can do what they want to do. I mean, let’s face it. They’re politicians. They want to tell people the good things they’re going to do for them, not the bad things they’re going to do.”
Hear more on Facing the Future. Concord Coalition Executive Director Bob Bixby hosts the program each week on WKXL in Concord N.H., and it is also available via podcast. Join us as The Concord Coalition team discusses issues relating to national fiscal policy with budget experts, industry leaders, and elected officials. Past broadcasts are available here. You can subscribe to the podcast on Spotify, Pandora, iTunes, Google Podcasts, Stitcher, or with an RSS feed. Follow Facing the Future on Facebook, and watch videos from past episodes on The Concord Coalition YouTube channel.
