Budget Hawk: Why Is Congress Telling Detroit to Get its Fiscal House in Order?

On Nov. 21, House Speaker Nancy Pelosi (D-Cal.) and Senate Majority Leader Harry Reid (D-Nev.) sent letters to Detroit’s Big Three automakers indicating that Congress would consider a Detroit bailout “provided that you submit a credible restructuring plan that results in a viable industry … while protecting taxpayer investments.”

Writing in The Washington Post yesterday, Robert Bixby, who heads the Concord Coalition, a budget watchdog group, pointed out that the request “rang a bit hollow coming from lawmakers who have no plan of their own to avoid a fiscal debacle that could be many times more serious than anything the automakers face.”

From Bixby’s op-ed piece:

Pelosi and Reid declared that the American people “deserve to see a plan that is accountable to taxpayers and that is viable for the long-term,” with “significant sacrifices and major changes to [the automakers'] way of doing business.”

These sound conditions should be applied to the federal budget as well. Unfortunately, though, there is no special guardian of future generations to make such demands. That job belongs to our elected leaders. They, too, must demonstrate significant sacrifices and major changes to their way of doing business. After all, they share responsibility for the nation’s future just as the Big Three executives share responsibility for the future of the auto industry.

Bixby makes a good point. This year the federal debt topped $10 trillion — a figure so large that New York City’s storied debt clock could no longer contain it. And the number is almost certain to leap significantly in the next few years.

Deficit spending in 2009 is expected to top $1 trillion, and there’s mumbling that it could approach $2 trillion. Most economists agree that the Keynesian approach of borrowing to pull through a recession is the right one — and President-elect Barack Obama has plenty of plans to do just that. But there’s been less talk of how Washington policymakers plan a return to balanced budgets when the economy gets better. (All that borrowing, remember, is intended to produce millions of jobs.)

It’s not the first time we’ve heard this warning about out-of-control federal spending. In the days after Congress passed its Wall Street bailout, David Walker, former U.S. comptroller general, pointed out the two significant differences between the current economic crisis and that facing the federal budget: One, the budget crisis is many-fold larger; and two, there’s no one big enough to bail out the federal government.

“My question,” Walker said at the time, “is when are they [Congress] going to start dealing with the bigger problem?”

The title of Bixby’s piece is “Congress in a Glass House.” Considering the budget mess the country is in — and considering that Congress has done little to balance its own books, even in the high-flying times of the housing boom — it is certainly apt.