Down We Go
I was in Washington, DC this week, for a series of policy meetings that included a brief lobbying trip to Capitol Hill on Thursday afternoon. I got to shake Hillary Clinton's hand and took part in one of three photo ops that the junior Senator from New York staged on the steps of the Capitol. I also got to remove and refasten my belt twice in congressional office buildings, chatted with Rep. Edolphus Towns along with some colleagues from the workforce community, and generally refreshed my sense that it's another world down there, surreal and utterly disconnected from both the everyday concerns of most Americans on either side of the great political divide, and, in times of political irresponsibility such as those we're currently enduring, from the most objectively distressing issues of the day.

Even as I and a couple hundred other workforce development researchers and advocates were convening Wednesday afternoon, getting ready for our largely symbolic and meaningless ventures up the Hill to preach to the converted and dispirited Democrats, a truly important, and almost totally ignored, policy event was being held less than a mile away:

While Washington plunged into a procedural fight over a pair of judicial nominees, Stuart Butler, head of domestic policy at the conservative Heritage Foundation, and Isabel Sawhill, director of the left-leaning Brookings Institution's economic studies program, sat down with Comptroller General David M. Walker to bemoan what they jointly called the budget "nightmare."

There were no cameras, not a single microphone, and no evidence of a lawmaker or Bush administration official in the room -- just some hungry congressional staffers and boxes of sandwiches from Corner Bakery. But what the three spoke about will have greater consequences than the current fuss over filibusters and Tom DeLay's travel.

With startling unanimity, they agreed that without some combination of big tax increases and major cuts in Medicare, Social Security and most other spending, the country will fall victim to the huge debt and soaring interest rates that collapsed Argentina's economy and caused riots in its streets a few years ago.

"The only thing the United States is able to do a little after 2040 is pay interest on massive and growing federal debt," Walker said. "The model blows up in the mid-2040s. What does that mean? Argentina."
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Walker put U.S. debt and obligations at $45 trillion in current dollars -- almost as much as the total net worth of all Americans, or $150,000 per person. Balancing the budget in 2040, he said, could require cutting total federal spending as much as 60 percent or raising taxes to 2 1/2 times today's levels.

Butler pointed out that without changes to Social Security and Medicare, in 25 years either a quarter of discretionary spending would need to be cut or U.S. tax rates would have to approach European levels. Putting it slightly differently, Sawhill posed a choice of 10 percent cuts in spending and much larger cuts in Social Security and Medicare, or a 40 percent increase in government spending relative to the size of the economy, and equivalent tax increases.

The unity of the bespectacled presenters was impressive -- and it made their conclusion all the more depressing. As Ron Haskins, a former Bush White House official and current Brookings scholar, said when introducing the thinkers: "If Heritage and Brookings agree on something, there must be something to it."

I've heard, second-hand, a different version of Isabelle Sawhill's take on this question. The version I remember, and I might have the details wrong, held that we'd have to cut discretionary spending--everything but statutorily mandated entitlements--by 94 percent to get the budget deficit under control. With that clearly not happening, her more realistic--and deeply pessimistic--conclusion was that we would have to endure both tax hikes and spending cuts... and would still face deficits well into the future.

I suppose it's true that we get the government we deserve. In a time when the revelation that the administration, knowingly and with malice aforethought, lied the country into a hugely expensive and unnecessary war that has claimed over 1600 American lives is met with almost total indifference, the fact that the coming fiscal crush (which, of course, will make its arrival felt, in terms of world markets and the economic climate, long before 2040) is completely off a public agenda still consumed with social issues and "fixing" something that's clearly not broken--Social Security--isn't surprising. That won't make it any less painful, however, when the moment comes that we can no longer pretend no problem exists.

Back to you, Dana Milbank, with thanks for being one of the very few journalists who hasn't totally abandoned his public service responsibilities:

The unity of the bespectacled presenters was impressive -- and it made their conclusion all the more depressing. As Ron Haskins, a former Bush White House official and current Brookings scholar, said when introducing the thinkers: "If Heritage and Brookings agree on something, there must be something to it."
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Not surprisingly, the Heritage and Brookings crowds don't agree on an exact solution to the budget problem, but they seem to accept that, as Sawhill put it, "you can't do it with either spending or taxes. Eventually, you're going to need a mix of the two." Butler wants taxes, now at 17 percent of GDP, not to exceed 20 percent. Sawhill prefers 24 or 25 percent.

But such haggling seems premature when both parties still deny the problem. "I don't think we're there yet," Walker said. "The American people have to understand where we are and where we're headed."

And where is that? "No republic in the history of the world lasted more than 300 years," Walker said. "Eventually, the crunch comes."