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Ornstein: No Budget, No Pay Is No Solution

Proposal to force budget resolution won’t solve problems facing Medicare, Social Security

Let me begin by revisiting the “no budget, no pay” idea. It originated with Rep. Jim Cooper, D-Tenn., one of the most thoughtful and conscientious members of the House, a man who came back for a second tour in the chamber determined to speak truth to power. He has had some very good ideas to overhaul Congress. This is not one of them.

“No budget, no pay” provides collective punishment for actions that are beyond the control of individual members of Congress. It plays to the worst instincts of voters, throwing red meat to those who have contempt for Congress and their lawmakers. And it gives independently wealthy legislators who don’t need their pay tremendous leverage over those who depend on it.

When the group No Labels was putting together its overhaul package, which includes many commendable elements, I argued strenuously with its leaders not to include a “no budget, no pay” provision, saying that to do so would be to pander. They instead made it their centerpiece and sent out a crowing, and cringe-worthy, fundraising email after the House Republicans included it in their debt limit extension.

There is no doubt that the charge that the Senate has not produced a budget in three years has resonated with many voters; I hear it over and over again from both Republican partisans and independents. I happen to agree with former Senate Budget Chairman Kent Conrad of North Dakota that the charge is false and that the Budget Control Act is a budget that passed the Senate in 2011 and is more like a budget resolution on steroids because it is a law, not a resolution.

That brings us to the next point. Having a budget is nice, but not much more than that. In general, it does not have all that much force. A congressional budget does not require a presidential signature and, absent a set of reconciliation instructions, is far from the be-all and end-all of congressional power or responsibility. The fact is that going back to 1990, at least, the major actions on the budget, the ones taken to keep deficits under control, have been done not through the regular order of the budget process but through extraordinary negotiations that include the White House and congressional leaders. That was true with the Andrews Air Force Base negotiations in 1990, when the politics were dramatically less dysfunctional than those we have faced in the Obama years. Over the past three years, any Senate budget resolution would have been dead on arrival in the House.

It may be different now, of course. The Senate is likely to pass a budget, under reconciliation to avoid a filibuster, that includes a substantial increase in revenue from oil companies, other corporations and wealthy individuals, along with some cuts in the growth of programs, as a counter to House Budget Chairman Paul D. Ryan’s budget. Maybe that will bring House and Senate leaders together, and maybe it will lead to what we need: a third $1.2 trillion to $1.5 trillion in deficit reduction over the next 10 years that would stabilize the debt-to-gross domestic product ratio at a sustainable level. It would involve compromise between the parties and chambers; $400 billion to $600 billion in revenues, most of it from reducing deductions and credits, and $600 billion to $800 billion in program reductions, most of it from entitlements, and it would alter the sequester formula to provide a more rational formula of cuts in discretionary spending than mindless, across-the-board ones.

There are relatively easy ways to get the right kind of balanced package. A formula to cap all deductions, except for the charitable ones, that can raise $400 billion over 10 years, combined with the promise of more substantial tax reform, is just that — easy. On Social Security, changing the cost-of-living formula to chained consumer price index, if combined with a more generous minimum benefit and some protections for disabled individuals, can work. I could also see a gradual increase in the retirement age — but only if there were a significantly more generous minimum benefit and reasonable early retirement option to enable those with back-breaking or mind-numbing jobs to opt for retirement and Social Security benefits at age 62. I would combine these changes with Sen. Al Franken’s idea to use a “doughnut hole” formula for Social Security taxes, leaving the current ceiling on wages subject to the Federal Insurance Contributions Act up to, say, $500,000, and then applying the FICA tax to incomes higher than that.

On Medicare, I would both strengthen the cost-cutting measures included in the Affordable Care Act and give them a chance to work — but with benchmarks every two years for the coming decade to reach the desired levels of cost reduction and automatic increases, means-tested, in premiums and co-pays if they are not met under the ACA. Another option is to have automatic cuts in doctor and other provider pay if the benchmarks are not met, adding a powerful incentive for providers to find ways to make the cost control measures work.

If the budget resolutions lead directly to this kind of compromise, I will happily eat my words about the “no budget, no pay” provision. Far more likely, of course, is that the budget resolution will not much matter; any deal, if we get one, is going to come from extra legislative negotiations between the White House and congressional leaders.

Norman Ornstein is a resident scholar at the American Enterprise Institute.

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