Fiscal Cliffs Forever

Over the next few hours, it seems that the Senate will pass a three-month highway spending bill to ensure that federal transportation funds aren’t abruptly cut off. The idea, in theory, is that this measure will buy lawmakers enough time to contemplate a broader overhaul of how we finance our highways. Earlier this month, the Senate passed a measure that will authorize funding for the Interstate Highway System for the next six years, drawing on a wide array of gimmicky revenue-raisers that have to be seen to be believed. Congress is unwilling to raise the federal tax on gasoline (I’m with them on that), yet it is also unwilling to rethink how the federal government finances surface transportation, and indeed the extent to which it should be involved in the surface transportation business at all. So we lurch from crisis to crisis.

There is an even bigger fiscal cliff looming on the horizon, as Andrew Biggs of the American Enterprise Institute recently reminded me. The Disability Insurance Trust Fund will run out of money next year, a fact that should concentrate the mind given that roughly 9 million Americans now collect monthly disability benefits. For years, reformers on the right and the left have been devising strategies for reforming the federal safety net for disabled workers, and there has been some convergence. Proposals from David Autor and Mark Duggan on the left and from Richard Burkhauser and Mary Daly on the right are broadly similar, in that they aim to boost labor force participation among the disabled by, among other things, improving the incentives for employers to accommodate disabled workers. Reforming our approach to disability is about more than the state of the Disability Insurance Trust Fund. It is about the fact that millions of Americans are isolated by our dysfunctional disability programs, which affects not only them but their families and their neighborhoods. And in purely fiscal terms, the federal government’s obligation to disabled workers goes far beyond disability payments. These individuals are also entitled to Medicare benefits, and in many cases housing subsidies and other benefits as well. Helping those women and men can make a meaningful economic contribution do so will help them. Yet it will also help ease the fiscal burden faced by taxpayers, which will only grow more onerous as the Social Security and Medicare rolls continue to expand. 

So is Congress debating disability reform? No. As a matter of fact, the main proposal on the table is to simply merge the DI Trust Fund with the Old-Age and Survivors Insurance Trust Fund, the one that finances retirement benefits. In case you’re wondering, this other Trust Fund is not exactly in the best of shape either, for reasons Charles Blahous has explained, and merging the two will hasten the latter’s exhaustion. Where is the effort in Congress to rethink these programs so that they can achieve the goals we’ve set out for them at a more sustainable cost? There isn’t one, or rather there isn’t a serious one, as far as I can tell. If I had to guess, I imagine that we will inch closer and closer to the point at which the DI Trust Fund will run out of money, to allow as many weeks of grandstanding as possible, and then the congressional GOP will cave to Democratic demands that the Trust Funds be merged. And why wouldn’t they? If Republicans aren’t offering any superior alternative, despite the fact that conservative policy analysts have devised workable, cost-affective alternatives, caving is inevitable. 

All of this brings to mind a larger problem: unless conservatives offer genuine alternatives to how we finance our highways (let’s devolve authority to states, or let’s increase the role of the private sector) or how we protect the interests of the disabled without trapping them in dependency, we will again and again find ourselves in these idiotic, nickel-and-dime battles over whether to extend this or that outdated, ineffective, obscenely expensive program for three months or six years. 

Reihan Salam — Reihan Salam is executive editor of National Review and a National Review Institute policy fellow.

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