Who Says We Can’t Address Deficits?

With regard to the nation’s long-term fiscal challenge, nothing is more striking than the conflict between our absolute necessity to act at some point and the widespread doubts about our ability to do so.

The doubts arise from the following argument: Our political system is more polarized than ever, with Democrats and Republicans less willing to compromise their principles to achieve results. After November, Republicans will be even less inclined to compromise, having picked up many congressional seats (if not control of at least one chamber) after almost uniformly opposing everything President Obama has sought to do. They will maintain their uncooperative stance, viewing it as the path to further weaken Obama and ride continuing anti-Democratic disgust back to the White House in 2012.

I don’t minimize the challenge of rallying the two parties around a comprehensive plan to reduce the deficit, one that will have to include, among other things, cuts in Medicare, Medicaid and Social Security as well as tax increases that will anger Democrats and Republicans, respectively.

But, lest we wallow in self-pity, lest we allow our political doubts to become a self-fulfilling prophesy of tragic proportions, perhaps we can find some comfort in recent history. So, for a dash of optimism that will perhaps improve our collective mental health, let’s take a trip down memory lane.

Let’s return in particular to the 1980s and early 1990s, a period that, upon reflection, may not be that different than ours.

For starters, it was a period – like ours – when deficits were structural and seemed insoluble.

The deficit soared from $79 billion in 1981 to more than $200 billion (and an economically dangerous 6 percent of gross domestic product) in 1983, hovering around that level for the next three years. Though the deficit fell to about $150 billion in the late 1980s, it again topped $200 billion in the early 1990s and approached $300 billion (and 5 percent of GDP) by the time President Clinton took office in 1993.

It was a period – like ours – of rising partisanship.

President Reagan and congressional Democrats, who controlled the House during Reagan’s two terms, clashed fiercely over his tax cuts, his cuts to domestic spending, his anti-communist efforts in Latin America, his judicial picks, and his Iran-Contra affair. Reagan’s Republican successor, George H.W. Bush, also fought bitterly with congressional Democrats while Bush’s Democratic successor, Bill Clinton, fought a dramatic budget battle with congressional Republicans that led to two government shutdowns.

It was also a period – like ours – in which pundits bemoaned the lack of political leaders in Washington.

Reagan was mocked for his ignorance, Bush for his verbal miscues, Clinton for his personal foibles. None, the pundits proclaimed, measured up to the historic figures who have occupied the Oval Office.

The pundits also looked at House Speakers Tip O’Neill, Jim Wright, and Tom Foley, at Senate Majority Leaders Howard Baker, Bob Dole, and George Mitchell, and at the chairmen and ranking members of key congressional committees – and they bemoaned the lack of lawmakers of the stature of Sam Rayburn in the House and Richard Russell and Phil Hart in the Senate.

So, this was no period of inter-party peace or political contentment. It was, instead, a time when, as I wrote recently in a “Letter from Washington” for the Henry Jackson Society, “American politics grew meaner and more partisan, when opinion leaders worried incessantly about perpetual gridlock between the President and Congress and between the two parties on Capitol Hill, [and] when the political risks of raising taxes or cutting popular benefit programs grew clearer with each incumbent’s re-election defeat.”

Yet, the Presidents, congressional leaders, and rank-and-file members of those years set aside their anger and worked within and across party lines, passing several rounds of deficit-cutting legislation that, along with a roaring economy, turned huge deficits into huge surpluses by the late 1990s.

They achieved lots more as well – including tax reform, welfare reform, immigration reform, health improvements, and trade expansions. They battled fiercely but decided that, for their own political well-being or simply because they wanted to get things done, they would cooperate as well as fight.

Will it be, as Yogi Berra purportedly once said, “déjà vu all over again?” Will the past be prologue? Will the bitter enemies of 2010 become the occasional cooperators of 2011, 2012, and beyond?

Perhaps not. But let’s not write off the possibility just yet. After all, a Republican Party that finds itself in control of both the House and Senate after November could well face public pressure to fulfill its promise to address surging deficits. And the only way to do that is to cooperate with Obama.

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