Redefining the Next Policy Debate

Jared Bernstein is a senior fellow at the Center on Budget and Policy Priorities in Washington and a former chief economist to Vice President Joseph R. Biden Jr.

Like everyone else, I’m glad the debacle over the budget and debt ceiling is over, but I don’t have high hopes for the next one. For the Democrats, as one friend concisely put it, “we now go from fighting with Ted Cruz to arguing with Paul Ryan.”  

The dynamic will thus move from the dangerous to the merely dysfunctional. But I’ve got a different and, in my humble opinion, more profound beef with the current moment in the policy debate: the federal government spends way too much time on fiscal policy to the exclusion of everything else. And that, in itself, is a conservative victory. A big one, in fact.

Obviously, I’m not dismissing the importance of fiscal matters. (Insert obligatory sentences about importance of getting budget on long-term sustainable path … slowing growth of health care costs … balancing cuts and new revenues. …)

Essentially, in the past week or so the Washington debate shifted from “Obamacare will destroy us all!” â€" which was a loser because it’s here to stay, and, anyway, only a small minority of legislators really believe that to “the deficit and debt will destroy us all,” a belief far more widely held.

I just did an experiment, and I promise I didn’t cheat. I told my wife, “I’ll bet you both The Times and The Post are leading with the-next-budget-fight stories today on A1″ (she didn’t appear to be listening, but that’s not the point). Sure enough, they are.

So we’re immediately back to the old argument about spending cuts versus revenues, which again doesn’t seem likely to get anywhere. Which means it’s an argument about spending cuts, and Republicans have already made the peculiar offer to replace sequester cuts with entitlement cuts: “O.K., O.K., you win! We’ll let you raise defense spending in exchange for cuts to Social Security and Medicare” (Senator Harry Reid â€" he of the stiff spine â€" tersely called that “a stupid trade.”)

Imagine instead that the politicians turned not to the budget deficit but to the jobs deficit, the infrastructure deficit, to poverty, wage stagnation, immobility and inequality.  Along with a budget conference â€" and don’t get me wrong; I’m glad they’re talking â€" imagine there was an economic conference to make recommendations on what’s really hurting the country, which I assure you is not our fiscal situation.  That’s taking care of itself for the short term, as is always the case after a recession (deficits go up in recessions, for obvious reasons).

Yes, I know I’m dreaming â€" the current Congress is incapable of shaping and passing legislation that would address our real economic problems. It also appears to be incapable of dealing with our actual fiscal challenges. If anything, by trying to destabilize Obamacare instead of improving its implementation (which needs improvement), conservatives are undermining the best chance to get control of the source of our future budget pressures.

I’m surely going to jump into the budget debate myself any minute now, but before I do, I wanted to point out that this is not the debate we should be having. It’s the preferred debate of those who seek to shrink the role of government, to undermine social insurance, to reduce needed investments in public goods and human capital, and to protect the concentrated wealth of the top few percent.