John E. Sununu

Real budget issues front and center

By John E. Sununu
April 11, 2011

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FOURTEEN YEARS ago, President Bill Clinton and congressional Republicans started down a path that ultimately delivered the 1997 Balanced Budget Agreement. As a new House member, I served on the Budget Committee led by a hyperactive and engaging chairman named John Kasich. Although I was one of the youngest congressmen at the time, John’s energy and outlook often made me feel like an older brother. Two years later, Paul Ryan, an even younger congressman from Wisconsin, joined the committee; and today as its chairman, he may be poised to repeat history in more ways than one.

Last week Ryan released a draft outline of the House Budget Resolution for 2012. Reporters typically describe this as “legislation’’ or a “budget bill,’’ which can be a bit misleading. In reality, the resolution is a broad outline of all federal spending and taxes. It creates a roadmap for both the coming year and the longer term since it can lay the groundwork for permanent changes to tax and spending policy.

Ironically, the Budget Act was written with the goal of creating a more structured, deliberative budget process. Instead, the effect has been just the opposite. Because the budget resolution describes everything the majority party thinks should be done with the budget — from taxes to Social Security, defense, and education — there is inevitably something in the resolution for everyone to hate. The Budget Act has made the process more partisan.

So why bother? There are two important contributions the resolution can make, even in the current fractious environment. First, the way the law and budget rules are written, passing a resolution can help control spending by capping various accounts. This year, the House passed stronger budget rules. It remains to be seen how effective they are, but something is better than nothing. More important, in the right environment the resolution can help change the terms of debate.

For weeks, critics of the spending debate have noted that explosive entitlement costs are the main cause of our long-term deficits. They have all but dared Ryan to take on these big-ticket items, and he has called their bluff. Ryan proposes significant changes to the largest and fastest-growing part of the budget — Medicare and Medicaid. In an act of bipartisanship, his blueprint for Medicare reform was developed jointly with Alice Rivlin, budget director for President Clinton.

Ryan’s draft also sets a target limiting federal spending to roughly 20 percent of GDP. This raises an important question that should be part of any long-term budget discussion: How much of the economy should be consumed by the federal government? If you think government agencies are highly efficient engines for job creation and resource allocation, you might not care. But politicians who want to spend more should have to defend this, and not just ignore the question.

Finally, the resolution goes beyond the “third rail’’ of entitlement reform to tackle issues like agriculture and defense spending. By accepting the administration’s proposals for reforming Pentagon spending, Ryan will agitate military supporters in his own caucus. His criticism of farm subsidies will raise hackles on both sides of the aisle. There are plenty of other areas of the budget that would benefit from scrutiny, but by leaving nothing untouched, he sends a wake-up call to every member of Congress.

Placing these ideas front and center will help focus attention on the real issues that need to be resolved if we ever hope to bring the long-term deficit under control. The most immediate partisan response will be that the spending levels are “unrealistic.’’ Over the next 10 years, Ryan’s budget spends $6.2 trillion less than President Obama’s budget, but even then the government would still be larger than under President Clinton.

Another line of attack will be to say that this budget can’t possibly pass the Senate. True — but the job of the House isn’t to write resolutions on behalf of the Senate. Its job is to pass a budget outline that provides a framework for negotiations. Passing this budget in the House puts pressure on the Senate to answer the same questions without passing the buck.

Although President Obama doesn’t sign the budget resolution, he does have to sign any spending or entitlement bills that come out of Congress. It would be nice if he were to show some interest in the process. So far, that hasn’t happened. His own budget ignored the recommendations of his own deficit commission and the exploding costs of Medicare, Medicaid, and baby boomers.

In an unprecedented act last month, 64 senators signed a letter begging the president to “engage in broader discussion about a comprehensive deficit reduction package.’’ The silence from 1600 Pennsylvania Avenue has been deafening, but in the House, Ryan has put together a resolution answering that call.

John E. Sununu, a regular Globe contributor, is a former US senator from New Hampshire.