Reflections Blog

Swallowing the Bitter Pill of Compromise

As parliamentarian governments around the world have long known, governance frequently requires compromising with one’s opponents in order to get anything accomplished, and a contrarian minority can wield substantial influence beyond its size by casting its votes with one coalition or another—and being coy with all sides about which way it’s going to vote until its intransigent demands are met by the coalition most willing to bend to the minority’s will.

We have now seen this power play in action in our federal government’s recent prolonged debate over raising the debt ceiling.  The insurgents our case were the minority Tea Party lawmakers in the House of Representatives who stood belligerently firm in their mantra of “no new taxes” and effectively held John Boehner and other mainstream Republicans hostage until the Tea Partiers (mostly) got their way.  The Tea Party and the Americans who support them are reacting in an understandable way to America’s growing debt crisis and the government’s inability to address it.  Something has to be done, and they favor radical action regardless of the consequences to the nation and the economy.  Michelle Bachmann and her cohorts would have been content if the debt ceiling hadn’t been raised and the nation had defaulted on its financial obligations.  They have said they would have done this “in the name of fiscal responsibility.”  I doubt that they appreciated the irony of that statement.

Cutting spending will not fully address the issues, but many Republicans are adamant in their demand for no additional taxes, especially on the rich.  In this regard, they are entrenched in the supply-side economics of Ronald Reagan.  They believe that if more money is in the hands of people wealthy enough to invest it, then jobs will be created and the economy will flourish.  They also believe in smaller government (which means fewer services) and a deregulated economy.  If nothing were regulated, then businesses would be free to be inventive, but they would also be free to cut corners and take advantage of consumers wherever they could.  It would be nice to believe that businesses wouldn’t do this, but sadly the lack of regulation and government oversight has too often led to financial, social, and environmental abuses. 

Although I appear to be laying all the blame on the Republicans, they are not the only culprits here.  President Obama and other old-line Democrats, with their fixation on preserving every entitlement program—most importantly, Social Security, Medicare, and Medicaid—have also been intransigent for ideological reasons, despite ample evidence that without significant changes and cuts to these programs the country will be bankrupt in 10 years—or less as more and more baby boomers retire and start using those benefits.  As a socially conscious person, I applaud the Democrats’ good intentions.  They want an America that looks after its elderly, that enables them to get the health care they need, that provides a stream of income that frees them from work, that allows them to stay in their homes or go to a nursing home, to have a reasonable quality of life if they have not been able to save adequately for their golden years.  It’s a noble aspiration.  Unfortunately, it’s not affordable.

The Tea Partiers in Congress have been acting like spoiled children in a schoolyard:  “Play the game my way,” they seem to be saying, “or no one can play!”  On the other side of the aisle, Harry Reid and his fellow Democrats have been just as obstinate:  “Don’t you dare touch my sacred cows!”  President Obama is certainly smart enough to recognize that entitlement reform is essential, but he would not want to be the Democratic president who engineered the kind of sweeping social and fiscal reform that would bring social security, Medicare, and Medicaid in line with what is actually affordable in our current economy. 

It may not be as clear to the government as it is to most citizens of this country, but America’s debt crisis is far and away our biggest problem, and it has to be solved while it is still possible to solve it.  President Obama—and legislators on both sides of the aisle—need to swallow the bitter pill of compromise and resolve this crisis before it becomes catastrophically worse.  Sadly, they don’t seem capable of agreeing to disagree on their high-handed principles and then compromising on pragmatic solutions, and Obama doesn’t seem willing or able to lead them to this outcome.

Beyond basic principles, the problem for the Democrats is the huge voting bloc baby boomers represent.  Some politicians, at some point, are going to have to reform our entitlement programs, and that will mean not only disappointing a large and relatively prosperous group of voters but angering them and propelling them to action.  Yet it must be done.  Inevitably, entitlements must be reduced.  Seniors must pay more for medical treatment, hospitalization, and prescription drugs.  Worse, for many who have not saved for retirement, social security payments will need to be delayed until people are older or reduced.  For seniors who have not saved adequately for retirement, or who have suffered from catastrophic illnesses that sapped their life savings, this will be another bitter pill to swallow.

America got into this mess in a remarkably short period of time.  When Bill Clinton left office, the U.S. had a surplus.  Under Clinton, our budget was balanced and we had accumulated enough of a surplus to pay off the national debt in its entirety.  When George W. Bush took office, instead of paying off the debt, he returned that surplus to the American people (principally the rich) in the form of tax cuts.  Then we were attacked on 9/11, and Bush made the correct decision to engage in a war in Afghanistan against the enemies who attacked us.  However, he did not fund the war by raising taxes, which as a conservative Republican he was loathed to do.  Instead, he funded the war by borrowing money (mainly from China).  Then he foolishly decided to extend the war into Iraq for what we now know were bogus reasons—and he borrowed money to pay for that war, too. 

As a result, in Bush’s eight years in office, America went from a budget surplus to a $6 trillion budget deficit.  When Obama took office, he should have looked upon that enormous deficit as the single biggest problem he had to solve.  We were in a recession, the economy was in turmoil, and the nation needed great fiscal discipline to navigate those treacherous waters.  Instead, Obama chose expensive healthcare reform as the centerpiece of his first year in office, and he has added $1.5 trillion to the deficit the government of George W. Bush created. 

What the country needs now is a leader (from either party) who will bring fiscal discipline to Washington; who will lead Congress to enact the budget cuts, entitlement reforms, and increased taxes necessary to reduce our debt and restore confidence in our economy as well as our government; and who will help Americans, especially seniors, accept that the government cannot provide for all their needs in retirement, that they must accept some of that responsibility themselves.  It will not be easy.  That’s why it calls for enlightened leadership.  To get through this mess, we all need to swallow the bitter pill of compromise, and it’s going to take political leaders with the will and skill to show us that swallowing that bitter pill is not only necessary but, in the end, if not sweet then at least palatable.

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