Californization of Washington

WSJ Economics Editor David Wessel says the capital is taking on some of Sacramento's same dysfunctional features, especially on health care. The political system, he writes, is unable to cope with complex, long-term fiscal issues.

Today, the deficits projected are bigger than ever, baby boomers are beginning to retire, health-care costs keep rising and, surely, we're closer to the day when Asian governments grow reluctant to lend ever-greater sums to the U.S. Treasury at low interest rates. The Congressional Budget Office projects current policies would take the deficit from today's 10% of gross domestic product to over 20% by 2020 and over 40% by 2080. Yet today's politics appear more toxic, and the ranks of congressional leaders with the skill and desire to fashion compromises instead of talking points are depleted.

[CUT]

The challenge isn't coming up with options. The CBO has a book full of them, ranging from raising the retirement age to taxing carbon. It's arithmetically possible to eliminate the deficit exclusively by cutting spending. Wisconsin Republican Rep. Paul Ryan's Roadmap does. But there's no political majority for those proposals. It's arithmetically possible to eliminate the deficit by raising taxes, but the resulting tax rates would be politically and economically devastating. The challenge is fashioning a compromise that both solves the problem and is politically viable.