Deficit Hysteria Invades the Presidential Campaign

The smog of decades-old fiscal wars crept into the final debate — and the folks who want to cut Social Security managed to sneak in.

Deficit Hysteria Invades the Presidential Campaign

A woman holds a sign in protest during a demonstration by federal employees outside the Department of Labor in Washington, part of a mass demonstration organized by the American Federation of Government Employees (AFGE) to highlight the impact of across-the-board budget cuts known as sequestration on everyday Americans. (Photo by Andrew Harrer/Bloomberg via Getty Images)

Whether you think Donald Trump or Hillary Clinton prevailed in Wednesday’s debate — Clinton by sounding like an adult, Trump by clenching his jaw to keep from foaming at the mouth — one undisputed winner was an entity called the Committee for a Responsible Federal Budget. That awkward mouthful adorns a letterhead think tank that moderator Chris Wallace cited twice as an authority on the purportedly world-shattering dangers of government overspending.

The CRFB wears the bluest of ribbons at the forefront of the parade of worthies who have been shaking their fists at a falling fiscal sky for decades. Let’s call them the Responsibles. They are a wholly owned subsidiary of the Bowles-Simpson-Peterson Establishment, which has long crusaded to cut Social Security benefits and otherwise put federal government spending in a chokehold.

This is one of the hoariest of Republican themes. In 1961, when, for my sins, I held a summer job as an actuarial trainee at the Equitable Life Assurance Society, a corporate vice president lectured us about the death knell that was already, he insisted, sounding for Social Security. Now that I draw Social Security myself, I haven’t noticed any bouncing checks. But I digress.

If Trump were a normal Republican candidate, we would have heard a great deal more about nightmarish debt and entitlement crises during this campaign. Even as Republican presidents from Reagan to George W. Bush ran up the deficit and Bill Clinton ran surpluses, Republicans and Blue-Dog Democrats have thundered consistently on — deficit, deficit, DEFICIT, brought on by tax-and-spend liberals. This was the theme song behind the so-called sequester deal of 2012, which guaranteed years of budget cuts to generate austerity for the poor and underwrite the unending betrayal of working-class Americans of all colors who bear the brunt of globalization. Come deficit or surplus, the deficit hawks helped slow the post-2007 recovery by promoting right-minded panic against Keynesian spending.

The Responsibles have been, for decades, among the most effective propagandists in Washington — so much so that even Donald Trump, who never met a high-bracket tax giveaway he didn’t like, sprinkled smidgens of references to the dire “$20 trillion in debt” here and there to spice up his speeches. Nonetheless, having looked at Trump’s projected revenues and expenses, even the blue-ribbon Responsibles sniff that he’s a worse budget-buster than Clinton.

But doesn’t their condemnation of Trump’s budget as, from their point of view, worse than Clinton’s certify that these guardians of the budget are, as Chris Wallace said, nonpartisan?

Officially, these worthies can lay claim to the label because they do feature center-right Democrats (Leon Panetta is the best known) to lend a certain sheen. Former Federal Reserve Chairman Paul A. Volcker enjoys widespread esteem, so when he co-authors a New York Times op-ed with Peterson, and refuses to engage the progressive counterarguments, the conventional wisdom gets one more boost and the regressiveness of their argument is obscured.

Volcker and Peterson allow that bending the medical cost curve would help Medicare in the long run, but fail to acknowledge that the long run has already arrived. Panicky Americans are left to quaver at the unwarranted expectation that Social Security will go bust before they get to collect. Volcker and Peterson ignore the promise of progressive taxation. A financial transaction (or Robin Hood) tax does not interest them. Neither does cracking down on the corporate practice of tax evasion with shell games of offshoring profits. The appallingly regressive nature of the Social Security payroll tax does not catch their eyes. As the New America Foundation’s Steven Hill wrote in July, under current law,

…any income above $118,500 is Social Security-tax free. The practical effect of the cap is that billionaire bankers and CEOs contribute a far lower percentage of their income for Social Security than their secretaries and chauffeurs.

Calling proposals to balance the budget by further cutting the social safety net “nonpartisan” disguises the skewed nature of the center-right consensus that chokes off grown-up debate on the options. Americans are allergic to straightforward ideological disputation, so if we’re not looking closely, we regard “nonpartisanship” as a surrogate for “fairness and balance.” There’s not a progressive in the Responsible pack. But why should there be?  However willing clear-headed progressives are to acknowledge that government spending is not a sure-fire solution to everything that ails the body politic — not even close — they think that a good deal of unnecessary suffering could be avoided with the judicious use of deficits. This prospect does not catch Chris Wallace’s eye.

American politics is deadlocked in no small part because of received opinion — what Paul Krugman calls “budget hysteria.” However calmly Chris Wallace relayed the alarm of the Responsibles, the ground-note was just that — hysteria. A mature discussion would include both a thesis and an anti-thesis — the in-some-circles controversial idea that deficits aren’t necessarily bad things. Instead, we get ideological boilerplate.

Todd Gitlin

Todd Gitlin is a professor of journalism and sociology and chair of the Ph.D. program in communications at Columbia University. He is the author of 16 books, including several on journalism and politics. His next book is a novel, The Opposition. Follow him on Twitter: @toddgitlin.