MEANS: Budgeting solution: Close down the OMB

OPINION:

The nomination of former Office of Management and Budget Director Jack Lew as the next secretary of the Treasury and the discussion on raising the national debt ceiling should send a clear message to Congress. It is time to close down the Office of Management and Budget and to vote no on any increase in the debt ceiling.

The nomination of anyone from the Obama Office of Management and Budget to serve as Treasury secretary is a farce. The problem is that the president is in charge of an administration that refuses to administrate. Neither the president nor anyone else in the White House has any time for or interest in managing the government.

During the Kennedy administration, the federal government followed the lead of Defense Secretary Robert McNamara and built processes that developed programs to move America forward while simultaneously budgeting and managing these programs properly. The Office of Management and Budget became a creature of those processes. For several decades, succeeding Democratic and Republican administrations used those processes to budget and manage. It was not always pretty, but it worked to create frameworks for government programs and economic growth. The Office of Management and Budget would propose budgets with clear spending increases, spending cuts and tax revenue to support it all.

Over the course of Mr. Obama’s first term in office, that process has disappeared. The president has submitted “budgets” that have been almost unanimously voted down by the Democratic Senate. Spending has been completely out of control. Unemployment has been high. The economy is in shambles. The president has defaulted on any budgeting at all, asking Congress to put forward the real budget and cuts so that he can gain political advantage.

Any semblance of serious budgeting and management by the U.S. government has been replaced by ad hoc lurches from the House Budget Committee and periodic games of chicken over the debt ceiling.

The White House has replaced any real governing strategy with a calculated bet that if taxes were to go up on the middle class, if government funds were crudely sequestered or if the debt ceiling adjustment were not passed and the government were forced to shut down, then the Republicans would be blamed for it and the Democrats would gain the advantage. It is, hands down, the most cynical political strategy in memory. It is only due to the oratory skills of the president that it has worked at all.

It is time to stop. Study after study has warned that Medicare and Social Security are close to bankruptcy, and retirement support for elderly Americans is at risk. If America continues to run trillion-dollar budget deficits, faith in America and the dollar will collapse and bring down the global economy for good.

The United States is headed for another huge recession over the next four years. White House staff members are not fools — they plan to blame it on Republicans.

The president’s inaugural speech and State of the Union address will be eulogies for the U.S. economy. They will propose massive, new spending in areas like education, environment and alternative energy. Any functional Office of Management and Budget would point out that the money will never be there to support these programs — not even the important programs we now have like Social Security and Medicare. It is all a political joke. Rising interest rates and growing unemployment will actually drive tax revenues down.

What should Congress do? The “Boehner Rule” — offsetting spending increases with cost cuts that are never to be achieved — is pathetic. Congress keeps trying to cover itself with fig leaves, but Mr. Obama will never prudently budget or control costs. Congress is only negotiating against itself.

If this administration refuses to budget or manage, there is no need for an Office of Management and Budget. Shut it down and send Mr. Lew home following his confirmation for failing to do his job — it will save taxpayer money. If this administration does not want to budget, it is time to force it to do so. Congress must vote no on the debt ceiling increase.

It will be a train wreck, but it is time to save the country.

There will be widespread screaming about the “full faith and credit of the United States,” but here is a news flash: If Congress continues to support further debt to pay for the president’s spending spree, there will be no faith and no credit. Foreign governments will begin to withdraw from the United States deposits that fund our deficit spending, and the situation will be vastly worse than a government shutdown.

Here is the real message for the cynics in the White House: History will blame you. The Obama administration will go down in history as one of the worst and most dysfunctional in memory.

Grady Means is a businessman and economist, former assistant to Vice President Nelson Rockefeller and co-author of “MetaCapitalism, the e-Business Revolution and Design of 21st-Century Companies and Markets” (Wiley, 2000).