Breaking Bad – Avoiding the Fiscal Cliff

A shorter verison of this column appeared in the Washington Examiner

http://washingtonexaminer.com/breaking-bad-avoiding-the-fiscal-cliff/article/2512227

The impending “fiscal cliff” is the most thoroughly predicted disaster since the end of the Mayan Calendar. The problem is no one is willing to design and implement a real solution that has any chance of bipartisan support.

The cycle of dysfunction has existed for decades. The Federal Budget Act of 1974 created what was supposed to be a rational process for planning, approving, and implementing government spending. It quickly became an empty paper exercise as appropriations ignored the Budget Resolutions. When the difference became embarrassingly stark, the Senate simply gave up on passing one at all. Additional budget reform legislation was passed and immediately ignored. Gramm-Rudman-Hollings, Budget Reconciliation, and the Government Performance and Results Act (GPRA), all gather dust. Annual budget deals, and continuing resolutions, put off the day of reckoning. Reagan’s 1982 budget deal resulted in more revenue and no spending cuts.

Administrations annually create a new budget. Hidden inside the hundreds of pages is the “Current Services Budget”, or “Baseline”. This outlines how much it costs to maintain existing services at current levels. It factors in various cost drivers - cost of living increases, escalation clauses in contracts, etc. Budget battles are fought over the increase above current service levels. When officials propose budget cuts they are talking about cutting the increase, not cutting current service funding levels. Therefore, there is a built in “ratchet effect” to expanding government spending.

The latest looming cliff is supposed to wrench the Washington policy players out of denial and avoidance, forcing them to actually do something real. This will not happen unless certain things change.

Start with the basics – Use the “Current Service Analysis” levels as the budget framework. Administration and opposing budgets can be aspirations compared against the true baseline. That will level the playing field and keep everyone honest about what is really an increase and what is really a reduction.

Rise above ideology - Both Democrats and Republicans contributed to the cliff. Both sides spend like there is no tomorrow. Both sides embrace “sacred cows”. Both sides live in a world where their people are angels and their opponents are demons. A good first step is to admit that each side has some good ideas and each side has looney ones.

Democrats need to understand that even their most cherished domestic assistance programs are riddled with waste and inefficiency. Republicans need to realize that the Departments of Defense and Homeland Security are just as bloated and dysfunctional as the liberal programs they assail.

Make Inspector Generals and the GAO “rock stars” – The Government Accountability Office (GAO) has 3,100 employees. There are also 73 Inspector General Offices embedded in Cabinet Departments and major agencies. All these offices are filled with highly trained, dedicated, objective civil servants who document waste, fraud, abuse, and inefficiency as well as recommend actions to eradicate and prevent future squandering of public resources. They document over $650 billion in waste annually. That is $6.5 trillion in cost avoidance and direct spending reductions over the ten years everyone uses to discuss the fiscal cliff. Except for a rare instance, these reports, and their detailed recommendations, are universally ignored.

The next Congress will be as grid locked as the last few. Partisan votes in the House will die in a Senate unable to muster sixty votes to move legislation. Then there are possible White House vetoes.

Therefore, why not check ideology at the door and embrace stewarding public funds? One hopes overwhelming numbers of Members from both parties, as well as the White House, would agree that waste is waste. Pass budget bills that specifically mandate GAO and IG recommendations are implemented and corresponding amounts of documented waste, fraud, and abuse are cut from programs and agencies. Resurrecting effective Congressional Oversight is long over due.

Having everyone discover that they can all agree on something will shift from the culture of confrontation to a culture of collaboration. Beginning swimmers start in the shallow end of a pool and then move into deeper waters as their skills and confidence improve. Congress and the White House could move into more complex and contentious waters as their ability to respectfully and constructively disagree improves.

Allow for public input - “Crowd sourcing” is being successfully used in several European countries to harness collective wisdom for public policy. Using either an ongoing “crowd sourcing” process, or an annual referendum tied to tax returns (like the Presidential Campaign fund check-off), citizens could either identify what to cut or what to fund. Their input would initially be advisory and mature into binding guidance as seriousness and sincerity are displayed by all involved.

If Congress, the White House, the agencies, and the media, do not explore these ideas, America faces a crisis that will dwarf the chaos in Greece.

[Scot Faulkner was Chief Administrative Officer for the U.S. House of Representatives. http://citizenoversight.blogspot.com/]