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Runaway debt train needs real reform, not temporary fixes

Runaway debt train needs real reform, not temporary fixes
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It hasn’t gotten much notice in the rush of news about tax reform and, well, everything else, but the scepter of the debt limit is looming on the horizon — and it may return earlier than expected.

According to reports Monday, Treasury Secretary Steven MnuchinSteven Terner MnuchinGOP blocks Schumer effort to adjourn Senate until after election GOP noncommittal about vote on potential Trump-Pelosi coronavirus deal On The Money: Sides tiptoe towards a COVID deal, but breakthrough appears distant | Expiring benefits raise stakes of stimulus talks | Stocks fade with eyes on Capitol MORE has requested that Congress raise the limit by the end of next month. Republican leaders may consider attaching this hike to a big (likely awful) spending deal currently being hammered out.

The impending deal, of course, is not actually a budget; it’s the next can Congress is planning to kick after its latest stopgap spending measure runs out. Temporary spending measures have become so common that they now seem like the budgetary default, but as yet another fiscal cliff bears down, it’s worth considering why this scenario plays out so often and what the real consequences are.

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Temporary measures, usually some form of continuing resolution (CR), not only tie policymakers’ hands, they also often encourage waste. With no certainty about when the next round of spending will arrive or in what amount, agencies are not incentivized to cut costs or end programs that have run their course.

Nor can they effectively plan ahead for more fundamental projects. Over 70 programs in the Pentagon have been put on hold because of stopgap spending, and the Pentagon even said recently, “Nothing has had a greater impact on combat readiness than CRs.”

Of course, this broken system ultimately keeps spending so high that the debt limit must be raised (or suspended) again and again. In September, recall, the limit was suspended as part of a deal that included more spending piled on with it.

Since then, lawmakers have been operating under a vague deadline of some point in early spring when the $20.5-trillion limit is expected to be breached once Treasury’s “extraordinary measures” are exhausted.

Mnuchin’s newest request may accelerate the expected timeline, but the usual course of events is likely to play out again and again until Congress makes serious changes. In order to put any semblance of brakes on this runaway train, lawmakers should consider the following:

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1. Fix the budget process

This badly broken budget process simply has not worked in decades. Governing by default and crisis is no way to cut spending, and Congress should look to fix its rules and systems so that they can actually work as intended. Ideas for doing so abound.

2. Strengthen the debt limit and impose new fiscal rules

While they’re at it, lawmakers should reconsider the effectiveness of the debt limit itself. While it is the only current method for forcing a conversation on spending, and ending it without a replacement would be a step backward, keeping it as is will never allow steps toward real restraint.

Congress should look to other countries, such as Sweden and Switzerland, that have managed debt-to-GDP ratios more effectively than the U.S. and our debt limit, which essentially puts the brakes on overspending after the fact.

3. Quit the wagon-circling

Finally, congressional leaders — especially Republicans who claim to want to cut spending — have to stop their bad habit of objecting to any cuts to their favorite departments. Yes, mandatory spending dwarfs anything else. Yes, the Pentagon is the only constitutionally required bureaucracy.

But it is still a bureaucracy nonetheless, and dozens of potential cuts and reforms are well-documented — many even requested by military leaders themselves. Republicans simply cannot build a wall around the biggest portion of discretionary spending and expect to see progress or tradeoffs from the other side.

The same goes for Democrats who seem to work from the same over-the-top playbook no matter how tiny or necessary reforms to domestic welfare programs might be. Myths about entitlement programs can jeopardize Democratic policy goals, too.

The federal budget is large, growing and simply cannot be ignored as the United States hovers near $21 trillion in debt. Both parties and the system itself are to blame for the mess, but finger-pointing and blame-shifting will not pull the national finances back from the brink.

Only substantial and lasting reforms can do that, and it’s long past time for Congress to pursue them.

Jonathan Bydlak is the founder and president of the Coalition to Reduce Spending, an advocate for lower federal spending, and the creator of SpendingTracker.org. Follow him on Twitter @jbydlak and @Reduce_Spending.