Deficit reduction: Congress needs to stop worrying about it.

Four Great Reasons for Congress to Stop Focusing on Deficit Reduction

Four Great Reasons for Congress to Stop Focusing on Deficit Reduction

A blog about business and economics.
Jan. 28 2014 11:10 AM

Four Great Reasons for Congress to Stop Focusing on Deficit Reduction

Guys? Guys? What about the budget deficit? Guys?

Photo by Brendan Hoffman/Getty Images

A slightly bizarre Carrie Budoff Brown–Jake Sherman piece in Politico complains at length about the reduced political attention to deficit reduction, but since it's a news piece rather than an opinion one, it doesn't bother to clearly state why they think this is bad. I think it's good! Here are four great reasons for reduced political attention to deficit reduction:

1. The deficit is falling fast! They manage to concede this in the seventh graf of the piece but insist that the positive trajectory will last for "only a few years" before returning. It would be crazy to argue that Congress should never again worry about long-term budget issues, but if the situation has improved over the past couple of years and is set to improve for a few more years to come, surely that counts as a reason to consider putting some other items on the agenda.

2. The parties are in a hopeless state of disagreement on long-term budgeting! This isn't exactly breaking news, but I'm not sure there's much more to be said about the "cut domestic spending exclusively while cutting taxes and raises military spending" approach to long-term budgeting versus the "cut broadly and also raise taxes" approach. The leadership on both sides have explored this pretty thoroughly, there's no common ground, and there's no reason to think that spending more time arguing about it will bring us closer to resolution. Over the next "few years" we will have two congressional elections and a presidential election and perhaps things will look different then.


3. Nonbudget measures can improve the budget deficit! Any number of sensible immigration reform measures would, by increasing the rate of economic growth, reduce the budget deficit. For that matter so would sensible reforms to the patent system. So would a U.S.-EU free trade zone. So would some kind of crazy Yglesian scheme to encourage high-cost metropolitan areas to upzone. So would monetary stimulus. So would scope-of-practice reform. The list of subjects on which it is more plausible to envision bipartisan agreement than long-range budgeting is quite extensive. And constructive action on any of those fronts would in fact reduce the deficit and buy more time.

4. The deeper trends are good! Older workers' labor-force participation rate has been rising despite a crummy labor market. Health care spending aggregates have risen less than anticipated. It would be silly to simply presume that these trends will continue in 2014, 2015, and 2016, but it's also plausible that they will. It would be a shame to slash Social Security benefits as a way of pre-emptively heading off a projected spike in Medicare costs only to discover that Medicare costs actually don't spike. Obviously health care wonks shouldn't just turn their brains off for the next three years, but it's perfectly reasonable for members of Congress and their staff to say "let's wait and see."