Once upon a time there were five animals -- three chickens and two turkeys -- who were elected to sail across the ocean, in the most powerful boat around, with much needed medical supplies. The boat was powered by a sleek economy and a long tradition of innovation and hard work. Recognizing that along the way some decisions would have to be made, they agreed that the majority would rule, but that the majority would be defined by a vote of four of the five.
About a third of the way into their journey, the boat’s engine went into a stall and the boat started to move backward with the tide. By unanimous vote, they agreed to bail out the engine by paddling. But the strenuous paddling, along with the wear and tear from the first part of journey, weakened the hull and it sprung a leak. “No problem,” said one of the turkeys. “Leaks don’t matter. Full steam ahead.” So they paddled on. Awhile later the boat sprung a second leak. “We can’t worry about that now,” said one of the chickens. We have to try to rev up the engine. We’ll fix it later.”
Soon, a third leak, which had always existed as a threat but now looked like a growing crisis began gushing water and it quickly became apparent that if nothing were done, the boat was sure to sink.
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
“Let’s patch the first hole,” said the chickens. “But under no conditions do we want to touch the second hole.”
“No way,” said the turkeys. “We’re not touching the first hole until you agree to fix the first hole.”
Unable to get a four-fifths majority on either of the first holes, and in unanimous consent that the third hole was sacred, they just paddled on. Neither side would give in, even though they knew they were sinking. “If we can just make it to November,” said one turkey, “the other animals will see that you chickens can’t get anything done and they’ll put more turkeys on board and we can patch the second hole.”
“But the boat will still sink,” warned the chickens. And so they argued on until the boat sank and the animals died. So did the other animals on shore who needed the medicines and who had elected the chickens and turkeys to steer a sensible course.
That’s a long and obvious parable, but it seems useful in this climate when so many in Congress are being so irresponsible about the budget. And if the chickens and turkeys don’t get together soon, we’re all going to sink and die.
The good news, such as it is, may be that there’s a consensus on one thing: Deficits -- at least when they are in the trillions of dollars -- really do matter. They threaten to bankrupt the U.S., undercutting not only the entire economy, but also our national security. There’s some disagreement over whether they need to be attacked this minute or whether we should wait until the economy is on more solid ground, but that’s a relatively small difference in timing. A few months or even a year won’t be disastrous, although the longer we wait, the harder it’s going to be.
But cutting the deficit will require very tough decisions that Congress simply lacks the courage to make. There aren’t enough Senate votes (60) to get anything done and may never be. That’s why Republican Sen. Judd Gregg of New Hampshire and Democratic Sen. Kent Conrad of North Dakota proposed a deficit commission with real authority to do what has to be done. Republicans, who love to rail about cutting the deficit when they’re not in power, blocked it, with seven cosponsors of the measure voting no when it looked like it might pass. Democrats, who refuse to accept responsibility for the deficit, preferring to blame former President Bush, were just as bad, with about 40% of their caucus voting against it.
President Obama, who belatedly gave his support to the idea, then went ahead and created a president budget-cutting panel, but it has much less power. It will be composed of six GOP lawmakers, six Democrats and six people appointed by Obama, not more than four of whom can be Democrats. The panel won’t be able to recommend anything unless 14 of its members agree. So if most of the Republicans oppose something (i.e., tax increase) or if even half of the Democrats dislike something (i.e., steep spending cuts), then nothing will be approved. Even if the panel can work out a compromise, there’s no guarantee Obama and the full Congress will implement it.
And the early prognosis is terrible. Republicans are already ruling out tax hikes, but there’s no way the boat floats if we only cut spending. Only a third of budget is discretionary spending – half of that is defense. You could cut deeply into entitlements -- Social Security, Medicare and Medicaid -- but both parties are afraid of that. Democrats are forever accusing Republicans of forsaking the elderly, and when Democrats proposed relatively modest cuts in Medicare as part of the health care plan, Republicans went after them, scaring senior citizens with talk of death panels and rationing.
Common sense -- and even rudimentary math -- makes it obvious that we have to fix all three of the holes, a probably in one fell swoop. We need to cut discretionary spending. We need to reduce spending on entitlements. And yes, we need to raise taxes.
One can only hope that the animals on shore -- the voters -- find some way to make that clear to the chickens and turkeys before we all drown in debt.
-
Premium Tax Credit: Are You Eligible For This Health Insurance Tax Break?Tax Credits The tax credit can help qualifying individuals pay for coverage from the Affordable Care Act’s health insurance marketplace.
-
Winners and Losers of Fed Rate CutsNavigating interest-rate changes can seem daunting, but these areas of the fixed-income market could perform better (or worse) than others.
-
AI Regulation is Looming: Kiplinger Economic ForecastsEconomic Forecasts Find out what Washington and regulators have planned for artificial intelligence.
-
The Biden Tax Plan: How the Build Back Better Act Could Affect Your Tax BillPolitics Depending on your income, the Build Back Better Act recently passed by the House could boost or cut your future tax bills.
-
Kiplinger's 2020 Election ForecastPolitics For nearly a century, The Kiplinger Letter has forecasted the outcome of presidential elections to keep readers informed of what's coming and what it means for them. Here's our call for 2020.
-
The 2020 Election and Your MoneyPolitics We’ve assessed how the presidential candidates’ stances on financial issues will affect your wallet.
-
5 HEROES Act Provisions with a Good Chance of Becoming LawPolitics The massive federal stimulus bill just passed by the House of Representatives is "dead on arrival" in the Senate. But a few proposals in the bill have enough bipartisan support to eventually become law.
-
Vote by Mail: A State-by-State Guide to Absentee Ballot VotingPolitics With health authorities recommending people continue to social distance, the idea of voting by mail is becoming an increasingly hot topic.
-
9 Ways COVID-19 Will Change the 2020 ElectionsPolitics The 2020 election will be like no other in history, as the COVID-19 pandemic will upend the business of politics as usual.
-
How to Run for Local OfficePolitics If you’ve ever thought that you could do a better job than the elected officials currently in office, here’s how to launch a campaign—and win.
