Budgets, bipartisanship and our national security

This cooperation depends both on congressional leaders willing to set aside partisan advantage and on administration officials who understand that the benefits of having the support of Congress is worth the effort and political capital it takes to secure that support.
Both parties clearly recognize that enacting a long-term budget is important for our domestic welfare. Failing to construct a credible deficit reduction plan carries extreme risks, as markets and managers look for assurances that the United States is prepared to arrest the long-term fiscal spiral. Given the recent upheaval over Europe’s debt crises, further signs that the United States is incapable of addressing its fiscal situation could have dire consequences for the U.S. economy.
But we also should see budget deliberations as a national security priority, because our current economic posture leaves us highly vulnerable to both economic and national security disasters. The president should regard the conclusion of a comprehensive budget deal as central to his commander-in-chief duties.
The budget plans put forward contain no provisions for economic and national security shocks in the coming years. That is not a criticism, because one never builds disasters into long-term budgets. But the odds of us traversing the next decade without an unexpected shock are extremely small. Consider that in just the last 12 years we have experienced three unexpected economic shocks in the United States that almost any observer would classify as severe. These were the September 11, 2001, terrorist attacks, the 2005 Gulf Coast hurricanes, and the 2008-2009 financial crisis. The necessary response to each of these catastrophes included large public expenditures that deepened our budget problems. These do not even include the wars in Iraq and Afghanistan, which were undertaken with deliberation.
The list of potential catastrophes that could hit us in the near term is especially sobering. These include the possibility of a war with Iran over its nuclear program, a nuclear confrontation with North Korea, regional upheaval in the Middle East emanating from chaos in Syria, the terrorist acquisition and use of some of Syria’s chemical weapons, a virulent flu epidemic emanating from Asia, massive food shortages that endanger political stability in key countries, or a rapid descent of the European financial crisis.
We are living in a volatile world where we can expect events to occur that will require a decisive response from our government to prevent massive loss of life, long-term economic damage, or grinding insecurity. If our budget is so constrained or our political system is so partisan, that we cannot respond adequately, we are setting ourselves up for some hard times.

Yet we have the capacity to prevent and respond to all of this. The fundamentals of American society still offer the best hand to play. No other country has the same quality and variety of post-secondary education. We have the broadest scientific and technological base, the most advanced agricultural system, and the most influential culture in the contemporary world. Our population is younger and more mobile than in most other industrialized nations.  We still can flourish in this global marketplace if we nurture the competitive genius of the American people that has allowed us time and again to reinvent our economy.
We should see education, energy efficiency, access to global markets, the attraction of immigrant entrepreneurs, the production of increasing food supplies, and other factors as national security issues. Most of these elements – especially free trade, energy efficiency, and immigration reform – need not have a negative effect on the U.S. budget, and may, in fact, generate revenue for the government and savings for businesses. I would underscore that no attempt to gain the maximum strategic advantage from our human resource potential should fail to enact comprehensive immigration reform that resolves the status of undocumented immigrants and encourages the most talented immigrants to contribute to America’s future.
But our hard won advantages will be severely undercut if we fail to put our fiscal house in order. That will require a transcendent act of bipartisanship by President Obama and the Congress. If both sides reflexively attack the budgets of the other, positions will harden. In that event, we are likely, at best, to get another temporary budget fix that leaves most major economic issues unresolved.

This is an excerpt from former Senator Richard Lugar’s April 9, 2013 Georgetown Public Policy Institute Whittington Lecture. He is a visiting professor at the institute and head of www.TheLugarCenter.org