A few weeks ago, I had a conversation with a group of prominent business leaders that I’m still mulling over. We were talking about the intersection between business and government, and they were pretty unhappy. The chief target of their displeasure wasn’t any of the usual suspects, though.
Instead of lambasting taxes or regulations, they were most worried about uncertainty in Washington. Their business prospects, they argued, are being hurt by the inability of the political class — and in particular Congress and the White House — to come to terms on pretty much anything: from the year-end package of tax hikes and spending cuts known as the “fiscal cliff” to fixing the health care system to resolving our disagreements over immigration.
Now, uncertainty is baked into our political system. As soon as a law passes, hundreds of lobbyists head for Capitol Hill to try to change it, and scores more descend on executive-branch agencies to see if they can nudge the rules implementing the law as they’re written. Legislation that seems buried for good in Congress can abruptly rise from the dead and pass both houses, while laws that passed easily a few years ago suddenly find themselves imperiled.
“Nothing ever gets settled in this town,” George Shultz once told the House committee on which I sat when he was secretary of state. “It’s a seething debating society in which the debate never stops, in which people never give up.” Given the nature of our representative democracy, certainty and finality are simply not achievable.
Yet the businessmen I met with had an important and valid point. The range of really crucial issues on which Congress has been unable to find common ground is immense. It has yet to decide what to do about tax cuts that are about to lapse. It has a budget in place only until March and has not come to terms with the threat of deep cuts to spending that were part of the debt ceiling deal of 2011. It’s left issues like the future of estate taxes, a new agriculture bill, ensuring the security of our information infrastructure, and a rickety postal service on the table. And it hasn’t given a clue as to how it might want to address issues that are key to our economic competitiveness in coming decades: education, infrastructure, taxes, immigration and the like.
As we near the end of the year, anyone trying to plan ahead has to confront the fact that government policy for both the near and long terms is wildly unforeseeable. And no one expects the upcoming election to clarify much of anything.
This interminable gridlock in Washington produces a signal lack of leadership. Unable to formulate policy, let alone think strategically about the future, Congress punts. Which is terrible for the country. As The New York Times noted a few months ago, “A rising number of manufacturers are canceling new investments and putting off new hires because they fear paralysis in Washington will…undermine economic growth in the coming months. Executives at companies making everything from electrical components and power systems to automotive parts say the fiscal stalemate is prompting them to pull back now, rather than wait for a possible resolution to the deadlock on Capitol Hill.”
The problem is that politicians in Washington get so wrapped up in their own world that they seem unable to recognize the consequences of their inaction and last-minute antics. The bad habits they’ve developed in recent years — an inability to enact a budget or address taxes, the omnibus bills that concentrate power in the hands of just a few people, the lack of transparency and overabundance of partisanship — all have brought us to a point where people who depend on government to create a stable policy environment can no longer do so.
Yes, uncertainty may be built into our representative democracy, but so is the assumption that our elected leaders will take responsibility for bringing solidity to the policies that affect our society and economy. Politicians of both parties simply must step up their game, or they’ll create chaos.
Lee Hamilton is Director of the Center on Congress at Indiana University. He was a member of the U.S. House of Representatives for 34 years.