After two years of big-government spending, Americans elected Republicans en masse into Congress in hopes that a divided, partisan government would reduce the spending through sheer lack of big, bold, but costly programs. As the theory goes, since neither party has enough votes to pass any game-changing legislation, nothing that seriously adds to the country’s long-term budget deficit should be passed. Right?

There’s just one problem.

Yes, the budget deficit is one huge concern. This is why Republicans have been so effective in portraying Democrats as out-of-touch spenders in a recession. Yet it’s the words “out-of-touch” rather than “spending” that is key: Democrats were perceived to pursue their own agenda despite a wounded economy, so it’s the context of their spending, rather than the spending itself, that caused the downfall of their majority.

As such, legislation that deepens the deficit is permissible as long as it is perceived to help the economy. And so, under the same context, the topic of extending the Bush tax cuts came up. As Americans largely believe that tax cuts- at all levels- stimulate the economy more than inefficient government spending, it is becoming all but certain that the cuts will be extended for at least two years, if not indefinitely. At the same time, since Democrats do not want the tax cuts to be extended for the upper middle class, they want to use the cuts as leverage for an extension in unemployment benefits that Republicans have staunchly opposed.

The result is an extension of the tax cuts and an extension of unemployment benefits, the most costly option on the negotiation table for the extensions. But isn’t divided government supposed to be good to the budget deficit? What happened here?

At the core, legislators’ role is to legislate- doing nothing is not an option. However, since neither party has enough votes to pass their bills by themselves, any action is done through compromise. In such a weak economy, the actions taken are usually those that appease the public the most. These tend to be the most costly, as seen by the option that Congress took with the Bush tax cuts.

Compromises can be costly and add to the budget deficit, so a divided Congress may not be the debt-slashing hero on a white horse we were hoping for. Although I don’t disagree with the actions they are taking- the economy is still quite weak- motivation for serious actions on our national debt does not come that easily. Instead, voters will need to be in a good enough mood to tolerate the spending cuts and tax hikes involved. Their representatives in Congress, whether with dominant majorities or split seats, do not seem to have that type of appetite yet.


(Photo: Serge Melki)