Eminent economist Martin Feldstein, former chairman of the Council of Economic Advisors during the Reagan Administration, had an op-ed in The Washington Post earlier this week that shows he just doesn't understand what's happening with the budget conference.
Here's the money quote:
The key to a political compromise is to recognize that raising revenue does not require increasing tax rates. Substantial revenue could be raised by limiting the government spending built into the tax code."
Feldstein accurately notes that this would give congressional Democrats enough of what they want in a budget deal to agree to changes in mandatory programs, especially "slowing the growth of Social Security and Medicare."
I'm willing to bet that most of you -- part of a readership that is far more interested in the federal budget than any group of typical Americans -- didn't know that the deficit was significantly lower in fiscal 2013 than it was in 2012.
For the record, the Treasury reported a little over a week ago that the 2013 deficit was $680 billion, a 38 percent drop from the approximately $1.1 trillion deficit in 2012 and 48 percent less than the $1.4 trillion deficit in 2009.
The 2013 deficit was 4.1 percent of GDP, the smallest since 2008. Fiscal 2013 was the fourth consecutive year the deficit has fallen as a percent of GDP. And the 4.1 percent-of-GDP deficit was almost a third less than the 6.0 percent that had been projected when the White House submitted its fiscal 2014 budget to Congress less than 6 months ago.
House and Senate budget conferees will formally get together again this week. This will be their first meeting since the ceremonial opening session on October 30 featured nothing more than politically self-serving opening statements,
Expect nothing to happen at this meeting...unless you believe that a further hardening of the positions each side stated at the last meeting represents something happening. it's simply too early in the process for anyone to offer a concession of any kind. The meeting will also be way too public for anything like a serious discussion, let alone an actual negotiation, to take place.
As I've said before, a budget conference committee of 29 representatives and senators is so unlikely to be able to agree on anything that, unless they want to go hungry, they had better delegate to a single staffer the authority to decide what to order for lunch. That's especially true if the lunch discussion takes place in an open hearing where CSPAN and others are broadcasting the deliberations.
Expecting little to happen should be the mantra for everyone following the budget events scheduled for the next few months.
Appropriators have hated the Congressional Budget Act since even before it was enacted in 1974.
During the two years in which that act was drafted, revised, re-revised, debated, re-debated and eventually adopted, appropriators from both houses complained that it wasn't needed, that they already had the power of the purse that was being given to the budget committees, that they had been the stewards of the people's money since the beginning of the republic, that it infringed on their jurisdiction and that it wouldn't work.
That attitude has barely changed over the past almost 40 years, which is why it was hardly a shock when my friend Jim Dyer, former staff director of the House Appropriations Committee, emailed me last week to say that it was time to do away with the budget act. With Jim's permission, here's the exact quote from his email: