Stop ig­nor­ing that 21 tril­lion-pound go­rilla in plain sight

The Tribune (SLO) - - Opinion - BY JOHN R. KA­SICH

Do deficits mat­ter? Clearly, the White House and a sub­stan­tial num­ber of con­gres­sional Repub­li­cans can’t de­cide. On one hand, they sound like cost-cut­ting deficit hawks when out on the stump or is­su­ing tweets. But once the TV lights go off, they turn ta­bles to sup­port record spend­ing and deficit-driven bor­row­ing that have left us with an un­prece­dented bur­den of na­tional debt — more than $21 tril­lion to­day and count­ing.

So which is it? Do deficits mat­ter or not? Be­cause if they do — and I count my­self in that cor­ner — then the U.S. econ­omy and all of us who de­pend on its well-be­ing are in deep trou­ble un­less we turn things around fast.

It’s a mys­tery to me why po­lit­i­cal lead­ers and com­men­ta­tors who fash- ion them­selves as con­ser­va­tives could think or act oth­er­wise. For as long as I can re­mem­ber, in­creas­ing deficit spend­ing and na­tional debt topped the list of con­ser­va­tive taboos. An even big­ger mys­tery is why deficits and debt were not hotly de­bated in the re­cent midterm elec­tions. Ev­ery other is­sue, ridicu­lous or sub­lime, got a full air­ing, but the 21 tril­lion-pound go­rilla sit­ting there in plain sight was ig­nored by both par­ties and the me­dia as well.

These is­sues de­serve full dis­cus­sion. Deficits, debt and their root cause — spend­ing — truly mat­ter. Over the long term, deficit spend­ing is detri­men­tal to eco­nomic growth and na­tional pros­per­ity. And as deficit spend­ing con­tin­ues, its ad­verse ef­fects add up over time.

When work­ers, busi­nesses and en­trepreneurs use sav­ings to pay for in­creased gov­ern­ment spend­ing and bor­row­ing, that leaves them with less to in­vest in small busi­nesses or ini­tia­tives; less for cap­i­tal im­prove­ments and in­no­va­tions that en­hance pro­duc­tiv­ity; and less to put aside for in­evitable down­turns or un­fore­seen events. The bot­tom-line re­sult is less growth and in­no­va­tion — and pres­sure to take on even more debt.

Our abil­ity to re­strain spend­ing and thus con­trol the na­tion’s debt sends an im­por­tant sig­nal to fi­nan­cial mar­kets that the United States is a sta­ble, wel­com­ing place for job cre­ation and in­vest­ment. Deficits and debt made in­evitable by over­spend­ing send a far dif­fer­ent mes­sage.

So for those of us who be­lieve that deficits mat­ter, what’s our so­lu­tion? I look back to my days in Congress on the House Bud­get Com­mit­tee. As com­mit­tee chair, I worked with the Clin­ton White House and lead­ers in both cham­bers to ham­mer out the Bal­anced Bud­get Act of 1997, which led to slower spend­ing growth, lower cap­i­tal gains taxes, lower debt held by the pub­lic and some first steps to­ward con­trol­ling en­ti­tle­ment costs. That hap­pened be­cause of good­faith, bi­par­ti­san col­lab­o­ra­tion and some hon­est po­lit­i­cal give and take.

Sadly, that bi­par­ti­san spirit didn’t last. Af­ter a few more bal­anced bud­gets, the old prob­lems of deficit spend­ing re­turned, driven in large part by the costs of na­tion-build­ing, un­paid-for tax cuts and a continuing fail­ure to ad­dress en­ti­tle­ment re­form. Con­trol­ling spend­ing was no longer a bi­par­ti­san goal, and it hasn’t been for all the years since.

The only way to solve our present dilemma and re­turn some fis­cal san­ity to Wash­ing­ton is for lead­ers on both sides of the con­gres­sional aisle and both ends of Penn­syl­va­nia Av­enue to re­dis­cover a way to work to­gether on the prob­lems they were sent to Wash­ing­ton to solve. I know it can be done be­cause I once helped make it hap­pen in Congress, and now we’ve made it work for eight straight years of struc­turally bal­anced, cost-cut­ting bud­gets in Ohio.

It won’t be easy and it sure won’t hap­pen overnight. But step by step, it can work. Those steps: Do it over time; take out the pol­i­tics; mod­ern­ize and, if nec­es­sary, pri­va­tize gov­ern­ment pro­grams; elim­i­nate those not meet­ing 21st cen­tury needs; and don’t let peo­ple stuck in the sta­tus quo dic­tate your agenda.

In other words, find ways to pro­vide high­qual­ity, ef­fi­cient pub­lic ser­vices at lower costs. That’s some­thing ev­ery other sec­tor of the world­wide econ­omy has found a way to do — ex­cept a fed­eral gov­ern­ment that’s un­will­ing or un­able to act. We did it in Ohio when we dra­mat­i­cally re­formed our Med­i­caid pro­gram and cut our spend­ing growth from a 9 per­cent yearly av­er­age be­tween 2009 and 2011 to an av­er­age of less than 4 per­cent from 2012 to 2013 - all with­out deny­ing cov­er­age to those who rely on it.

Do deficits mat­ter? Of course they do. But maybe we’re ask­ing the wrong ques­tion. Deficits mat­ter be­cause they’re a symp­tom of run­away gov­ern­ment spend­ing that weak­ens in­vest­ment by busi­nesses and in­di­vid­u­als to en­hance growth and pro­duc­tiv­ity. The sooner the White House, both par­ties in Congress and the Amer­i­can peo­ple wake up to that re­al­ity, the sooner we can all sleep at night with­out a $21 tril­lion debt hang­ing over our chil­dren’s and grand­chil­dren’s heads.

Ohio Gov. John Ka­sich, a Repub­li­can, ran for pres­i­dent in 2016. He served as a mem­ber of Congress from 1983 to 2001 and was chair­man of the House Bud­get Com­mit­tee from 1995 to 2001. He wrote this for The Wash­ing­ton Post.

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