Politics is an interesting blood sport. So much of what the media and the punditry are saying about the presidential nominees has little to do with what we should expect in terms of how each man would run the Executive Branch, administer existing programs, and try to sell new policy initiatives to Congress all while not getting us into another shooting war with some two-bit Middle Eastern or Central Asian nation.
Unfortunately the focus has been on Washington’s dysfunction. Congress has not passed a budget in three years. S. 3412, The Middle Class Tax Cut Act, a bill proposed by President Obama and passed out of the Senate by a 51-48 vote, now sits in the House where it probably has a snow ball’s chance in an air conditioned room in mythical Hades to pass a Republican-dominated chamber.
And let us not forget the not so mythical fiscal cliff. Congress and the President’s inability to address our trillion dollar plus deficit and $16 billion in debt means that as part of a sequestering package approved by Congress, come January 1, 2013, citizens will see an increase in their taxes compliments of the expiration of the Bush tax cuts.
We will also see a $1.2 trillion reduction in military and domestic spending. Medicare physicians will see a 27% cut in their compensation. If you think the number of doctors turning down patients on Medicare is bad now, watch out in 2013.
At least unemployment insurance and the payroll tax cut will be extended, but these extensions do little to increase national output or the hiring of labor.
At the heart of this is the inability of the parties to find some common ground. Democrats and Republicans are promoting entrenched positions that are tethered to the philosophies of their bases. This is making thinking outside of the box difficult for policy makers and leading to disastrous consequences to the economy.
“We need a politics of reasonable compromise”, said Bill Galston to me as we conversed over the benefits that could be provided to the minority community by a non-partisan approach to governance. Mr. Galston is a co-founder of the advocacy group No Labels.
No Labels perspective is very simple. The group, which is made up of Democrats, Republicans, and independents subscribes to the position that government can work again and that the American people have had enough of hyper-partisanship.
It should be noted that No Labels is not a political party. Don’t go to their website looking for platforms and plans. According to Mr. Galston, “There are plenty of plans out there but no one will agree to anything. What we have to do is to get people to declare a ceasefire. We have a country to govern here and what No Labels wants to do is to get everybody who needs to be at the table at the table.”
No Labels is apparently doing that, slowly but surely. For example, it is a big promoter of the No Budget No Pay Act. The bill would require that congressmen have their pay docked for every day after the beginning of a fiscal year that there is no budget in place for that fiscal year. So far 92 senators and congressmen have voiced their support for the Act. Senator Lamar Alexander, Republican of Tennessee, recently gave his support to the bill.
How relevant is non-partisan governance to the minority community? Take our labor markets. The pending fiscal cliff not only means budget cuts. It means government spending being withdrawn from the economy in the long run. While government contracts funded under past spending measures would have to be honored, going forward there will be less spending on projects resulting in a slow-down in economic activity. Contractors, sub-contractors, and their employees will be out of work.
Foreign investors and members of the domestic private sector may stop looking at the United States as a country to invest in meaning capital becomes scarcer. Banks may decide to lend and if they do, they will lend at higher interest rates that reflect the risk of investing. The decision to hire becomes tenuous and given double digit unemployment in the Black and Hispanic American populations, a lack of hiring and higher interest rates that trickle into consumer finance will only increase the hardships in these households.
In short, a dysfunctional federal government has a negative impact on our economy. A non-partisan approach as promoted by No Labels may not be a panacea, but it provides Washington with something it desperately needs: a dialogue.