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Dionne: First step, admit that deficit isn't the problem

Here's the mistake made by President Barack Obama and the Democrats that nobody is talking about: They have been too fearful of confronting our country's three-year obsession with the wrong problem.

And here is the tea party's greatest victory: It has made the wrong problem the center of policymaking.

The wrong problem is the deficit. The right problem is sluggish growth and persistent unemployment.

The paradox is that the deficit would be less challenging today if we had been less preoccupied with it since the 2010 elections. The deep cuts in government spending since then have slowed the very growth we need to make our way toward fiscal balance.

But relief may be on the way. More from political exhaustion than any change of heart, we may be about to take halting steps toward dealing with the issues we should have been grappling with in the first place.

The president's defenders would assert that he has been careful all along to emphasize the need for short-term stimulus to get the economy moving and to insist that deficit reduction was his goal only for the longer run.

That's true enough. But there are the words, and then there is the music. Since a Republican Party driven by tea-party thinking managed to make government spending and deficits Washington's paramount concerns, the administration has backed off aggressive efforts to use government to pump much-needed energy into an economy whose tepid growth since the 2008 implosion has left 11.3 million Americans still out of work.

By putting so much effort into negotiating a failed "grand bargain" with House Speaker John Boehner in 2011 and subsequently agreeing to the sharp, across-the-board cuts of the "sequester" to get out of a crisis, Obama contributed to the deficit chorus. Because of the fiscal tightening, our unemployment rate is probably a point higher than it would have been otherwise. We've done a heck of a job on the deficit, reducing it from about 10 percent of the economy in 2009 to 4 percent now. We've done badly by the jobless.

The administration would argue that it did a lot to avoid even more damage. It had to play the political hand dealt it by the 2010 elections while also facing the overwhelming consensus among political elites that deficit reduction was urgent. The commission that Obama himself appointed, led by Erskine Bowles and Alan Simpson, spread this gospel with passion and zeal — even if both acknowledged, usually in much softer tones, that the economy still needed a short-term boost.

Of course there should be no denying that we face fiscal challenges down the road. Over the next three decades or so, the retirement of the baby boomers will be expensive. Most of the spending will be in health care expenditures under Medicare and Medicaid. In an environment free from crisis-mongering and hyper-partisanship, passage of the Affordable Care Act could usefully have been seen as a first step toward what ought to be our goal: guaranteeing decent health coverage to all Americans, including the elderly, at a cost government can afford. And, by the way, no matter how successful we are at doing this, there is no way around the need for more government revenue as long as large numbers of baby boomers are around.


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