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Getting out of the budget and debt morass

By PETER MORICI, UPI Outside View Commentator   |   Oct. 4, 2013 at 10:20 AM   |   Comments

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COLLEGE PARK, Md., Oct. 4 (UPI) -- The U.S. government shutdown is proving less draconian than presidential warnings but failing to raise the debt ceiling and default would be another matter.

So many government activities have been deemed essential by legislation or presidential order that only 15 percent of the federal government is closed. The mail is moving and air traffic controllers are keeping the planes flying. Closed national parks are an inconvenience but at least the Internal Revenue Service has been furloughed from targeting conservatives for advocating reforms and other crimes against the revolution.

Still the shutdown can't go on too long without unprocessed small business loans and mortgages dragging growth but a resolution requires U.S. President Barack Obama and Tea Party to recognize the unreality of their positions.

The Affordable Care Act is seen by many as an illegitimate law. Unlike all past major social legislation, Democrats in Congress denied Republicans any opportunity to participate in its drafting and dragooned it through the Senate by attaching it to a budget reconciliation bill requiring no Republican votes.

When the individual mandate raised serious constitutional questions, Obama intimidated Chief Justice John Roberts into writing a legally incomprehensive decision to avoid damaging the Supreme Court's longer-term standing.

Those episodes reduced the ACA to little more than a presidential edict.

To resolve the funding crisis, the president should agree to delay the individual mandate a year -- just as he has done for businesses -- and propose negotiations with Republicans that would make the law more universally acceptable.

For its part, the Tea Party must let go of free market fantasies that the United States can return to the healthcare status quo ante -- the old system was broken, cost 50 percent more than what the Germans pay and delivers less-effective care by most measures.

If the debt ceiling isn't raised, the United States doesn't have to default. Taxes will be collected and the Treasury will have 80 percent of the revenues needed to meet anticipated FY2014 commitments.

Obama would have to set priorities to ensure that interest is paid. That entails spending cuts deeper than those imposed by the shutdown but hardly anything the country cannot endure until the two sides reach broad agreement on the shape of future budgets. That requires the president and Republicans to compromise on entitlements and a growth agenda for the economy.

Obama must accept legitimate reforms that restrict citizens and health service providers from gaming Social Security, Medicaid and Medicare and to accept some Republican suggestions for stimulating growth. Those include easing restrictions on drilling offshore and in Alaska and modifications to Dodd-Frank banking and other business regulations to reduce bureaucratic burdens.

Republicans must recognize a broad safety net is part of the American cultural fabric. Most everyone wants low-income Americans to have access to decent healthcare and some measure of income security -- even if the Tea Party is correct to demand those don't reduce incentives to work.

Both sides want tax reforms but "reform" is in the eyes of the beholder. Who couldn't agree that everyone should pay something? And our principal competitors abroad tax both corporations and individuals much less aggressively, encouraging businesses and entrepreneurs to move wealth and good jobs abroad.

It's high time for the Tea Party to abandon rhetoric about "makers" and "takers" and unrealistic demands about the ACA, entitlements and taxes.

It's high time the president curb his aggressive speaking tours that stir passions but do little to solve the country's problems back in Washington.

The framers established a separation of powers between the president and Congress for a reason. It mandates tolerance and compromise so that all interests are served, however imperfectly the limits of human wisdom may provide.

Both sides need to recognize these, cool the rhetoric and make deals that move the country forward. That's what a successful democracy demands of them.

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(Peter Morici, an economist and professor at the University of Maryland Robert H. Smith School of Business, is a widely published columnist. Follow him on Twitter: @pmorici1.)

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(United Press International's "Outside View" commentaries are written by outside contributors who specialize in a variety of important issues. The views expressed do not necessarily reflect those of United Press International. In the interests of creating an open forum, original submissions are invited.)

© 2013 United Press International, Inc. All Rights Reserved. Any reproduction, republication, redistribution and/or modification of any UPI content is expressly prohibited without UPI's prior written consent.
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