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What the New Congress Could Bring

BU profs see ethics reform, fiscal revamping, and a weaning from foreign oil

A new Congress gets down to business today. For the Democrats, who take control of both the House and Senate, it’s a day 12 years in the making. For the people who voted them into power on November 7, it’s a day of big expectations.

For some thoughts on what the next two years could — and should — bring from Washington, we asked BU experts about five major national issues: Iraq, Congressional ethics, fiscal policy, health care, and the environment. To these thinkers, we posed a single question: what can we expect from the 110th Congress?

Iraq
Andrew Bacevich
College of Arts and Sciences professor of international relations and history

Photo by Kalman Zabarsky

When it comes to ideas about Iraq, the Democratic-controlled 110th Congress won’t do any better than the Republican-controlled 109th Congress did.

Iraq is a train wreck. There’s no putting the train back on track.

What distinguishes the new Congress is that it has the report of the Iraq Study Group. Although derided by the Bush administration and its dwindling band of supporters, the findings of the ISG are likely to appeal to members of Congress for at least one reason: the report is the product of a bipartisan effort. Given the way that Washington works, it reeks of respectability.

Therefore, I expect that both Democrats in the new Congress and those Republicans who wish to distance themselves from the war will embrace the ISG report. They will do so less because the ISG offers “a way forward” than because it offers political cover.

In the meantime, the tragedy in Iraq will continue to unfold, unaffected by what politicians in Washington say or do.

Congressional Ethics
Julian Zelizer
College of Arts and Sciences professor of history

Photo by Kalman Zabarsky

We can certainly expect ethics reform from the new Congress. When an issue helps to knock a Congressional majority from power — as was the case in 2006 — legislators react. Democrats don’t want to face voters in 2008 with nothing to show them in terms of reform. Democrats, and many Republicans, will push for tighter rules on issues such as the permissible interaction between legislators and lobbyists as well as the limitations on former staffers dealing with incumbents.

But a big question remains: will Congress take the crucial step of creating an independent commission to monitor ethics rules? Unless this step is taken, the nation will not see substantial progress on improving Congressional ethics.

Fiscal Policy
Laurence Kotlikoff
College of Arts and Sciences professor of economics

Photo by Kalman Zabarsky

The country is in awful fiscal shape. We have huge long-term fiscal problems that are getting worse by the day. They are the result of decades of irresponsible fiscal policy, which have been made significantly worse by this administration. The only way out is to radically alter our fiscal institutions. In particular, we need to change our tax system, Social Security system, and health-care system along the lines that Niall Ferguson and I discuss in an article posted on my Web site called “The New New Deal” (New Republic, August 15, 2005).

In a nutshell, we need to eliminate all current federal taxes other than excise taxes and switch to a national sales tax with a rebate to make it progressive. We need to totally revamp Social Security so that it uses individual accounts but also collective investment in the market in a single global market-weighted index fund. And in health care, we need to go to an individual voucher system that would give everyone enough money to buy a health insurance policy that would cover basic needs, where the size of the voucher would depend on the recipient’s preexisting health conditions.

As far as what I expect from this new Congress, I think the president is going to veto any tax hikes. I think the reforms that I’m proposing would be appealing to both Democrats and Republicans, but it would take a real leader to advance these proposals, because each is so radical. Leadership is not a word one connects with today’s politicians. So I expect to see no major fiscal reforms of any kind in the next two years. I also anticipate that in the not-too-distant future, we’ll see a collapse in U.S. financial markets, with major hikes in interest rates, a collapsing bond market, and skyrocketing inflation as the government begins to print money to pay its bills.

Health Care
Alan Sager
School of Public Health professor of health policy and management

Photo courtesy of BU
School of Public Health

We can expect the new Congress to try to win lower prescription drug prices under the Medicare program by amending the current law. That law prohibits Medicare from negotiating prices with drugmakers. Unfortunately, it will be hard, in practice, for such an amendment to survive a presidential veto.

Even if it could survive, the existing Medicare drug program is so fragmented among the dozens of insurance companies that administer it today that it would be difficult for Medicare to assemble much buying power. It’s hard to put Humpty Dumpty together again.

Current U.S. health-care spending of $2.2 trillion — about four times defense spending — is already enough to finance the care that works for all Americans. Still, 47 million Americans have no health insurance, and most of the rest of us are underinsured.

Sadly, we can’t expect the new Congress to even try to move toward sustainable and affordable health care for all. That’s because most politicians think that the only way to expand insurance coverage is by spending more money — but more money isn’t available.
 
But there’s another way. Providing solid insurance coverage for all Americans will require squeezing out waste from existing spending and using that savings to finance care for people who are underserved today.

How much is wasted? Roughly one-half of existing spending is wasted — on unnecessary care stemming mainly from financial incentives to overserve, defensive medicine, and lack of evidence about what works; on administration stemming from mistrust and complexity; on excess prices; and on theft.

How to squeeze out the waste? Start by recognizing that doctors’ decisions control almost 90 percent of personal health spending. Squeezing out waste will require doctors’ active participation. It would be useful to negotiate a peace treaty with doctors, one that eliminated the threat that doctors could be sued and also eliminated their payment-related paperwork.

In exchange, doctors would take on the job of serving all of us well with the huge sums already available. But Congress isn’t there yet. Today’s wasted spending helps to finance business as usual, and most of the politically powerful interest groups are accustomed to more money for business as usual.

Environment
Robert Kaufmann
College of Arts and Sciences professor of geography and environment and director of the Center for Energy and Environmental Studies

Photo courtesy of
Robert Kaufmann

National security, the war on terrorism, and economic competitiveness will be used to justify the Democrats’ shift on U.S. energy and environmental policy. Democrats will argue that money spent on imported oil is used to support governments that oppose U.S. interests and support terrorists. To wean the United States from imported oil, Congress is likely to reallocate incentives and subsidies from the production of crude oil, which were included in Republican energy legislation, to alternative fuels, such as wind and solar. Legislation will be designed to commercialize alternative fuels and nurture markets. On the demand side, Democrats are likely to mandate increases in the energy efficiency of the U.S. automobile fleet, especially light trucks, minivans, and sport utility vehicles. Their average fuel efficiency in 2005 was lower than the average in 1991.

Changes in energy policy also will be driven by concerns about climate change, which is the most prominent environmental issue that Democrats are likely to tackle. Congress is likely to build on state efforts to regulate carbon dioxide emissions, which stem largely from burning coal, oil, and natural gas. States on the East and West Coasts have passed legislation that increases the efficiency of energy-using equipment and fosters emission-trading programs. Democrats will argue that in addition to slowing climate change, these types of environmental legislation will help U.S. firms compete in global markets, including financial markets — the European Union has established a market to trade carbon emissions. The nature of Democratic efforts will depend in part on an anticipated 2007 Supreme Court ruling — Massachusetts and several other states pressed the court to force the U.S. Environmental Protection Agency to recognize carbon dioxide as a pollutant and regulate its emissions.

Listen to a recent WBUR program on the direction of the new Congress.

Chris Berdik can be reached at cberdik@bu.edu.