David Brooks: The Fiscal Flop

From David Brooks:

They could have shown the world that the two parties can work together to avert the eventual calamity. They could have produced a balanced program that would have combined spending cuts and targeted tax increases. They could have reduced Medicare spending on the rich to free up more money for young families.

President Obama and Speaker John Boehner both earnestly wanted to achieve these things. But the deal we are heading toward is discouraging. Yes, the deal does raise $600 billion in revenue over 10 years from a tiny sliver of the population (compared with the $8 trillion in new debt likely to be accrued over that time).

But the proposal is not a balance of taxes and spending cuts. It doesn’t involve a single hard decision. It does little to control spending. It abandons all of the entitlement reform ideas that have been thrown around. It locks in low tax rates on families making less than around $450,000; it is simply impossible to avert catastrophe unless tax increases go below that line.

Far from laying the groundwork for future cooperation, it sentences the country to another few years of budget trench warfare. There will be a fight over drastic spending cuts known as sequestration, then over the debt limit and on and on….

Whom should we blame for this? Again, we should not blame Obama and Boehner. In their different ways, they and a number of other people in the Congress are trying to find a politically palatable way to deal with these hard issues. They got what conditions allowed.

Ultimately, we should blame the American voters. The average Medicare couple pays $109,000 into the program and gets $343,000 in benefits out, according to the Urban Institute. This is $234,000 in free money. Many voters have decided they like spending a lot on themselves and pushing costs onto their children and grandchildren. They have decided they like borrowing up to $1 trillion a year for tax credits, disability payments, defense contracts and the rest. They have found that the original Keynesian rationale for these deficits provides a perfect cover for permanent deficit-living. They have made it clear that they will destroy any politician who tries to stop them from cost-shifting in this way.