Volume XVIII No. 22:

Americans could be forgiven if it seems that the nation’s capital has been infiltrated by an army of Alfred E. Neumans serving in the Congress and at the White House. The mascot of Mad Magazine has a goofy grin and a motto of “What, me worry?” that seems apt for how the House of Representatives, the Senate, and the White House seem to be responding to the across-the-board budget cuts and the impending lowered budget caps of the next several years.

Oh sure, there is a lot of talk and concerns expressed about “sequestration” and the tightening caps that bipartisan majorities agreed to in the Budget Control Act of 2011 (BCA), but instead of doing anything responsibly about it they are pursuing parochial business as usual. No one seems interested in tackling the challenges with a package of reasonable proposals that could achieve equivalent deficit reduction. Instead both sides trot out their rehashed policies that have been rejected by the other side repeatedly and argue that it’s the solution.

What it means is more gridlock. Or worse, in utter capitulation they’ll throw up their hands and not do anything, or even worse than that decide to just turn off the BCA without doing a thing to deal with the deficit and future drivers of debt in this country. Remember, the across-the-board cuts of sequestration and aggressive out-year spending targets equally cutting defense and non-defense discretionary spending were supposed to force Congress into action to deal not just with spending, but revenues and entitlement reform. To just turn it off would put the nation’s finances in a worse position than before and tell the world and the markets that our country’s leadership is not interested in dealing with the very real fiscal challenges facing us.

The House Republicans just adopted a spending outline that would break the balanced cuts between defense and non-defense. The Senate Democrats adopted a budget that just assumes away the budget caps set by the BCA. And the White House keeps saying they’ve put forward plans to avoid sequestration several times without noting that those plans have been rejected out of hand every time as being non-starters.

The recent significant reductions in deficit projections by the Congressional Budget Office offer little fiscal solace. Yes, the predicted budget deficit for FY2013 fell by $200 billion from early predictions to $642 billion, which represents a steep drop from the FY2012 deficit of more than $1 trillion. But, the same CBO projections report indicates that even with the Budget Control Act discretionary spending caps – which no one seems to like – by 2023 we will be facing deficits nearing $900 billion. And most sobering, in their most likely model, CBO indicates that: “Debt held by the public would reach 83 percent of [Gross Domestic Product] by the end of 2023, the largest share since 1948.”

This means we cannot afford to have our policymakers emulate the freckle faced icon of childhood comics. Instead we need them to be superheroes of the budget process, maybe taking a page from one in theaters this summer: Faster than this gridlocked process, more powerful than the special interests, able to leap broad differences of opinion in a single bound. That would make them our hero.