If you have wondered, as I have, how legislation as bad as the Gramm-Rudman-Hollings "budget-balancing" bill could get through Congress, a study done earlier this year by a Carleton College professor may provide some illuminating answers. The bottom line is that the key players have only a limited understanding of the basic economic issues -- and, in any event, usually are motivated by narrow political considerations rather than the economic ones.
None of this will come as a surprise to those who give Congress increasingly poor marks for dealing with complex issues.
But what comes as something of a shock out of Steven E. Schier's 80 interviews with members and staff of the House and Senate budget committees is the sense of how poorly informed the congressional "experts" are on the budget. Because of the constraints of time and the priority assigned to political considerations, this elite group of members of the House of Representatives and the Senate relies on what they read in the newspapers or hear on television talk shows for much of its information.
"Members of Congress are not monks. Their working days are extremely active and event-filled, with the potential for exposure to far more information than they can consider or absorb . . . . One House [Budget] Committee member summed up the situation by stating, 'We're all flying around up here. The idea of giving sustained attention to any responsibility for very long is just not realistic," Schier said. His report was delivered to the annual meeting of the American Political Science Association on Sept. 1.
"Members don't know how to evaluate economic evidence and don't really want to do so. Why? They lack the time and skill and want to be able to ignore contrary evidence. Don't forget that many members are lawyers. To them, the task in politics is to seize on the best case and present it, not to be analytical in some social-science sense," said a Budget Committee economist.
Some important economic documents -- such as detailed budget appendices from the Office of Management and Budget, Federal Reserve Board material and Congressional Budget Office reports -- "are not immediately accessible to committee members due to their technical or analytical nature," Schier said in his report.
The time constraint can be less oppressive to House members or senators who know something about economics. Thus, Les Aspin (D-Wis.), a Budget Committee member from 1980-84 who has a Ph.D. in economics from the Massachusetts Institute of Technology, needs less time to understand background material than most of his colleagues. But few in Congress have training or experience of that kind.
For the most part, according to committee aides, there is little incentive for the average Budget Committee member to spend a lot of time studying economic issues because, in the end, the typical member of Congress must weigh the political costs and benefits of particular programs.
Schier quotes another House Budget Committee member this way: "The focal point of debate in committee can concern some economic theories, but the bottom line is this: What program is getting cut? Who will be burned? That is where the individual member is exposed."
Moreover, when the Big Four government officials -- the Treasury secretary, OMB director, chairman of the Fed and chairman of the Economic Council -- go to the Hill to testify on the budget, members aren't seeking information, but are trying to score political points for possible exposure on the 7 o'clock news.
A House Democratic member told Schier: "All these questions we ask about economic theory are used as a show for the press in order to embarrass administration witnesses at the hearings." Republicans play the other part of the game, seeking to defend the Reagan administration. Each side, of course, is aided and prompted by staff economists, who do much of the thinking for their principals.
As Schier observes, the danger of the rising deficit has been a matter of increasing concern in Congress, once it became evident that the promised magic of supply-side economics was not Realism was sacrificed to political aims and getting a resolution that could pass.going to work: There would not be a simultaneous reduction of the deficit that Reagan inherited from Carter, along with the huge 1981 tax cut.
"The pursuit of a credible deficit-reduction goal has become a major event of American 'high politics' involving congressional, administration and business leaders. Schier said. "The first step in this dance is the targeting of a credible deficit-reduction goal." But at the same time, the typical member of Congress is concerned about the impact of program cuts in his own district. Any conflicts have to be reconciled with what the leadership thinks is "passable" legislation.
In candid language, a House Democrat described the sequence of decision making this way:
"First you have to look at the overall number -- the deficit. Then you have to look at the big pieces . . . and ask, 'What can I get from these?' Then you look for vulnerable items, those both politically and substantively vulnerable. The question here is: 'Who should I go after?' Finally -- and all resolutions have this to some degree -- there's the B.S. list: specious assumptions about user fees, contracting out and the strategic petroleum reserve. The focus in all of this is to keep the overall choices in line with a credible deficit or deficit-reduction number."
But as we know from the painful 1985 result, the budget process this year produced resolutions containing optimistic economic assumptions, coupled with a paring down of expenditures -- but not enough to eliminate the prospect of deficits continuing in the $180 billion to $200 billion annual range. Realism, as Schier says, was sacrificed to political aims and getting a resolution that could pass.
It was this inability of Congress to cope with the situation that enabled Sen. Phil Gramm (D-Tex.) to seize control. Gramm, a right-wing economist dedicated to eradicating government services, produced a formula that enables Congress to claim that it is cutting the deficit without attaching the name of any senator or representative to cutting a specific program that will hurt back home. It is, as cosponsor Sen. Warren Rudman (R-N.H.) admitted, "a substitute for guts."
In a way, Gramm and Rudman proved Schier's academic observation: Given the limited understanding by its so-called specialists on economic issues and their overriding devotion to politics, Congress' existing budget "process" doesn't work to provide a decent product. But neither Schier nor anyone else has yet told us how to get one.