Who Would Be Able to Fix Our Finances?

Over at the Washington Post, Fred Hiatt asks whether Obama or Romney would be more likely to fix the nation's budget problems. He spends an entire column without arriving at any conclusion, though he does define success as a budget resembling the Simpson-Bowles plan. That plan involves a combination of increased revenues and entitlement cuts.

In the piece Hiatt basically accuses both Obama and Romney of being morally weak. Then he says:

Both men surely understand what has to be done, and both would have an incentive to do it. You could argue that Obama, believing in a larger role for government, has a larger incentive; none of his “winning the future” agenda will be imaginable except on a foundation of stable long-term finances. But no more would Romney want to govern through four years of recurring debt-ceiling crises and rising interest costs.

It's ridiculous to talk about Obama's and Romney's incentives: of course they want to fix the budget. But it's really about what's possible. The practical politics of the situation will decide what will happen, not what the president wants.

In a second term, Obama is freed from the pressures of reelection and having to cater to every special interest group in the Democratic Party. Like most moderate and Blue-Dog Democrats, Obama has already accepted the premise of the Simpson-Bowles plan. Which means that even if he can't get the most intransigent Democrats to work with him, with the help of a relatively small number of reasonable, truly patriotic Republicans could get some significant entitlement cuts enacted.

Romney, on the other hand, has already rejected the Simpson-Bowles plan out of hand because it includes tax increases. So, out of the gate, Romney simply cannot be successful by Hiatt's standard. Romney is campaigning with promises of even more tax cuts and increased military spending. These will vastly exceed the savings we could get from even the most draconian entitlement cuts. Romney can't flip-flop on these promises because he would have the cloud of a 2016 reelection run hanging over him. People like Grover Norquist would never allow Romney and the Republicans in Congress to consider anything remotely resembling a tax increase.

But let's say Romney does the unthinkable and proposes something like Simpson-Bowles. The vast majority of his party would revile him. Thus, just like Obama, Romney would have very little Republican support and would have to count on Democrats to provide most of the votes. The problem is, those Democrats would have no incentive to help Romney. For the last three years they've suffered from Republican filibuster, sabotage, obstructionism and intransigence. And because Romney's first actions in office would be to gut many of the programs Democrats favor (health care, etc.), they will be in no mood to compromise with him.

But that's all moot, because there's zero chance Romney would ever propose a plan like Simpson-Bowles in the first place. Which makes me wonder why Hiatt even bothered to ask the question.


In the end a lot will depend on what happens in Senate and House elections, and whether the Senate fixes the filibuster rule. But as long as Grover Norquist and the Tea Partisans control the party, any future under Republican control looks bleak.