Author Archive | Eric Patashnik

The Sequester May Be Dumb—But It Isn’t Arbitrary

President Obama last week lamented the stupidity of the automatic spending cuts contained in the sequester, calling them “dumb, arbitrary.”

The sequester (which imposes cuts in infrastructure, research, and other valuable programs at a time when the job market remains weak) may be dumb. But the sequester is not arbitrary, in the sense of being random or haphazard. Just the opposite. It would be hard to find another recent public policy that is a more precise and logical reflection of American political priorities (and partisan conflicts).

By design, the sequester does not trigger tax increases, and virtually exempts the major entitlement programs—Social Security, Medicare, and Medicaid—from spending cuts. In keeping entitlements and taxes off the table, the sequester bears similarity to the sequester mechanism contained in the Gramm-Rudman-Hollings (GRH) budget law of 1985. Under GRH, the base for sequestration was about 40 percent of federal spending. Programs that could not be touched included Social Security, Medicaid, and food stamps. Payments to doctors under Medicare could be reduced, but no more than 2 percent.

Just as today, the choices about what preexisting policies to target or protect in a sequester were revealing. As Joseph White and Aaron Wildavsky wrote about the GRH sequester in their excellent book, The Deficit and the Public Interest, “GRH calls for quite possibly dumb, from a program perspective, arbitrary, percentage cuts across many programs. But it would be false to conclude, as many have, that the act is mindless in the sense of lacking a strong sense of priorities. Indeed, in its inclusions and exclusions, GRH contains the clearest expression of national priorities of any single act every passed: clearly, what cannot be cut has priority over what can” [emphasis in the original].

In a similar vein, the current sequester expresses the priorities (and conflicts) of the contemporary American polity. The top goal of the GOP is to keep taxes low. The Democratic party’s core commitment is to protect entitlement benefits. The two goals are mutually contradictory from the standpoint of long-term budget policy, but at least for now, they can be reconciled politically.

 

 

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Bring back pork barrel spending

Many people complain about pork barrel spending, but pork adapts national programs to local conditions, and provides the grease that lubricates deal-making. Efforts to eliminate pork can actually make Congress less effective as a policy-making institution. In a recent Bloomberg Businessweek article, political scientist Sean Kelly, coauthor of Cheese Factories on the Moon: Why Earmarks Are Good for American Democracy, is reported to have found that Congress’s recent ban on earmarking has reduced the incentive of pragmatic members to serve on the appropriations committees since there are fewer goodies to hand out. Just last month, Patrick Leahy (D-Vermont) declined an opportunity to chair the Senate Appropriations Committee. News reports speculated that Leahy’s decision may have reflected new restrictions on the Committee’s ability to approve “special projects requested by lawmakers.”

Some insist that we can’t afford pork at a time when Congress is struggling to reduce the budget deficit. But pet projects are cheap, and if doled out strategically, they provide an efficient way for presidents and congressional leaders to build coalitions for broad-based national legislation, as Trinity College political scientist Diana Evans shows in her fine book Greasing the Wheels.

If Congress is ever going to pass a grand bargain that trims entitlements and raises taxes (pain for everyone), shouldn’t we give lawmakers something positive to vote for? Of course we don’t want to return to the days of outright bribery and graft. As Matthew Yglasias writes in Slate, however, the current dysfunctional Congress makes it “hard not to miss a little old-fashioned earmarking and pork.” Sure it would be nice if lawmakers didn’t need to be given side payments to vote for general-interest legislation, but that’s not the American way. As John W. Ellwood and I wrote in our 1993 essay In Praise of Pork, “Favoring legislators with small gifts for their districts in order to achieve great things for the nation is an act not of sin but of statesmanship.”

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Why Government Fails to Adopt Painless Solutions to the Nation’s Problems

The conventional wisdom is that the nation faces difficult economic choices, and that we cannot make progress on our collective challenges without imposing losses on someone. But in a provocative New York Times column, Cornell University economist Robert H. Frank argues that many important problems can be solved “without requiring painful sacrifices from anyone.”

Frank gives the example of highway congestion. Roads are crowded because they are generally free. Yet many Americans would gladly pay to avoid horrendous traffic delays. As Frank points out “A modest congestion fee, administered with E-ZPass-style technology, would raise needed revenue and provide an incentive to use crowded roads only when the benefits outweigh the social costs.” The congestion fee would be a burden for low-income households. But, Frank suggests, “because the gains far exceed their price, we can redistribute them so that everyone comes out ahead.” The more general point is that there are many potential reforms where the winners could compensate the losers and still be better off. Yet such “painless” solutions often fail to generate political support. Why not? Frank observes that the reforms may upset some ideologues and lobbyists, but that is at best a partial explanation.

Several years ago, Yale political scientist Alan Gerber and I invited leading scholars to contribute to an edited volume (Promoting the General Welfare: New Perspectives on Government Performance) on the failure of government as an institution to solve collective problems. Factors that our colleagues nominated for consideration included: the tendency of political competition by cohesive, differentiated parties to raise the political stakes in policy debates and inhibit the search for pragmatic solutions (Morris Fiorina); the failure of the federal system to function as a true “laboratory of democracy” that develops and spreads effective policy innovations across jurisdictions (Mark Rom); the failure to devise congressional rules and procedures that encourage the adoption of socially efficient laws (Sarah Binder); the elimination of analytic research bureaus like the Office of Technology Assessment (Eugene Bardach); and the tendency for electoral incentives to detour lawmakers “into small-bore distributive politics and feckless position taking” (David Mayhew).

To this list of factors, Gerber and I added another: developing novel solutions to promote the public good can be politically risky, because it requires a policy innovator to shift public opinion. This effort at persuasion is akin to making a risky investment, which can generate rewards for the investor or go sour. In a commercial setting, such an investment often enjoys legal protections such as patents and trademarks. But in politics, there is nothing to stop an opportunistic opponent who observes the changes in public opinion produced by his political rival’s effort to build support for a new policy from developing a similar proposal of his own.  If this copy-cat behavior is successful, the policy innovator will, at best, capture a small share of the credit for the result of his efforts, reducing the incentive to develop the policy innovation in the first place.

Gerber and I coined the phrase “Zero Credit Policymaking” to capture this political failure. As we wrote, “If problem solving is an unintended by-product of political competition rather than something pursued for its own sake, and if politicians are motivated to do what wins elections, a tension exists in our system of collective choice. From the standpoint of social welfare, a policy should be adopted if the benefits are greater than the costs, whereas from the standpoint of a politician, a policy should be adopted if the political benefits to the politician are greater than the political costs. Good policies that have large social but small political benefits may not find a political sponsor.”

Can anything be done? Focusing on Congress’s role, Yale University political scientist David Mayhew came up with a thoughtful list of reforms: streamline legislation (no more 1,000 page omnibus bills!) to help citizens better understand what their government is doing; open up congressional primaries to all voters regardless of party; encourage members to raise at least half their campaign contributions in their states or districts; package C-SPAN coverage in small segments that voters and the media can digest; and cripple partisan gerrymandering. All good ideas to promote the general welfare, but unfortunately they have not gained much traction.

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