Friday, June 10, 2011

Can Compromise Be Bad?

This blog is predicated on the concept that bipartisan cooperation is needed to address a host of challenges facing the United States and that legislators need to be willing to compromise their strongly held views in order to avoid gridlock, which either delays the day of reckoning or allows urgent problems to fester.

Are there times when this might be wrong?

I am thinking about the current budget/debt limit negotiations and the relationship to our current economic woes.

The parties have almost diametrically opposite economic philosophies these days. Progressives still believe that public sector spending is the proper response to recession and sluggish growth. They say our recovery has been weak because the economic policies since the beginning of the Great Recession (fiscal stimulus by the Obama Administration and monetary stimulus by the Fed) have been too timid.

Conservatives argue that governmental stimulus doesn’t work and that fiscal austerity will produce job growth by reducing the size of government (and its regulatory burden on business) and signaling to the private sector that the government is going to get its deficit problem under control.

Our current political system doesn’t give either side a chance to fully implement its vision. If Democrats truly had free reign, the initial stimulus bill would have been bigger, and there may have even been additional stimulus packages since then. Republicans have proposed a massive downsizing of the federal government, but they will not get their desires fulfilled either. Moreover, they will have to defend the proposals they have made, like the Ryan budget, without having a chance to see if they would work.

Groups like No Labels are advocating that the parties get together to solve our debt crisis. But can compromise half-measures really work to deal with an ailing economy? What if the politically feasible solution is not the right policy solution? Republicans want big domestic spending cuts as soon as possible. Democrats want to protect the current structure of the Medicare system. So could we get a debt limit extension with big short term spending cuts and only marginal Medicare reforms. I'm not an econmist, but what if the right answer economically is more robust short term spending but significant long-term entitlement reform to address the deficit?

In thinking about Gridlock, we focus almost exclusively on changes to help facilitate more compromise and deal-making. Perhaps we should think harder about reforms that enable the party in power to execute its agenda. Voters would then have a clear choice at election time to stay the course or make a change.

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