I have started a new gig posting a column 2-3 times a month at The Politicizer, an online opinion website for the “Millennial Generation”, whatever that is. The url is: http://www.thepoliticizer.com.

Here it is, my first column:

ROBINSON: The Battle Over Rules and Discretion Posted on August 2, 2011 at 3:56 pm

Filed under Economy, Government, Jonathan Robinson no comments

Jonathan Robinson, Columnist

By moving from politics based on discretion to rules based politics, the Republican Party leadership is signaling that more painful budget cuts are on the way, and that’s not a good sign for the economic recovery. Rules based politics constrict activist government and prevent progressive policy change by cocooning politicians from blame for unpopular political consequences when it is most convenient for the minority party.

Many times in politics, even the most complex economic and political issues that come up for debate can be distilled into essential dichotomies as can be seen with the debt ceiling and balanced budget amendment fights in Washington. Policymaking is a balancing act between playing by the rules at hand and negotiating a law with which both sides are satisfied. Over the past half-century economists have engaged in heated debates over the merit of rules versus discretion based policy making in the economic policy making arena.

The basic debate goes something like this: One side argues that rules are to be preferred, while the other prefers discretionary action on important pressing issues. Those who favor rules argue that they not only constrain politicians from abusing discretion but introduce an element of certainty into policy making that keeps markets happy and eases voters’ fears about manipulative politicians. Conservative economist Milton Friedman is famous for advocating a ‘rule’ for monetary policy conducted by the Federal Reserve. Under Friedman’s vision there would be no need for a Federal Reserve Board to choose monetary policy, just a bureaucracy to execute policies in response to changing economic conditions without the discretionary freedom to react to unique economic circumstances.

Although a few believe in this extreme form of governance, most seem to be in favor of some sort of discretionary governance in some shape or form on certain issues (still, partisanship plays a big factor). Take, for instance, the role of government in response to the financial crisis:

Those who favor discretion note its importance during crisis, where an activist government can respond skillfully and effectively to aid citizens and solve complex problems, even though it involves a bigger economic role for government. Critics of the rules based approach see rules as one way for Congress to avoid blame for unpopular actions by steering clear of tough issues. Some policymakers believe that government can be just as effective, if not more so, than rules based policies, and that discretion can tweak policy without negative side effects. Federal Reserve Chairman Ben Bernanke, speaking at an event honoring Friedman, jabbed:

On the issue of inflation control, Friedman may be judged to have been a bit too pessimistic; his concerns that central banks would have neither the technical ability nor the correct incentives to control inflation led him to recommend his money-growth rule, for which a central bank could certainly be held accountable. Evidently, however, determined central banks can stabilize inflation directly, at least they have been able to do so thus far.

As of late, the debate over the debt ceiling and the discussion of inserting a balanced budget amendment into the constitution (something that has been proposed by conservative Republicans many times, as far back as 1994) have seeped into the latest discourse about solving the crushing debt that the US has incurred to the tune of about 14 trillion dollars and counting.

The debt ceiling is an important rule, created by Congress to constrain the size of government spending. However, historically the debt limit has been raised at the behest of the Treasury Department many times so that the government could incur greater spending. Congress, in the past, has even enacted rules so they could avoid having to deal with the debt ceiling—also another rule! Known as the Gephardt Rule (which, the House waived this year when they got their chance to rewrite the House rules at the beginning of the 112^th Congress, providing more evidence that the Republican leadership wanted conflict about the ceiling), it is the perfect example of using rules to avoid making policy choices.

But voters should always be suspicious of rules that politicians create to constrain themselves. Politicians like to claim credit for popular programs and any rule that allows politicians to avoid blame for unpopular decisions should be a clear sign of rough waters ahead. According to the Christian Science Monitor:

In 1995, then-majority House Republicans waived the Gephardt rule. They refused to raise the debt limit in a bid to force President Clinton to accept spending cuts – prompting two government shutdowns.

While I understand the importance of rules, I smell something sinister about the choices that the Republican leadership is making. On the one hand they waived the Gephardt rule, allowing them the discretion to play chicken on the debt ceiling with the Democratic leadership, and to create uncertainty that a deal will be reached before the August 2^nd deadline. But what one hand giveth, the other hand taketh away.  By putting forth a balanced budget amendment to the Constitution that would force Congress to make cuts to offset any proposed budgetary spending it would send to the President, it would force Congress to make unpopular decisions and constrain its choices in times of crisis. By picking and choosing between which rules they like and which rules they don’t, the American public should be aware that by going down these procedural paths and forcing decisions to be made (whether you want to call them tough or unpopular) the Republicans plan to insulate themselves from possible backlash.

If the current budget debate is to be framed as a choice between rules and discretion, the public has to be aware that creating rules that force our nation down a certain path is a sly tactic, which can only mean that even more austerity is on the way. By inserting rules that command specific actions, as a Balanced Budget amendment would, Republicans can implement cuts to government spending, even in popular programs, while claiming to have only done so because it was a rule. As someone who believes that, now more than ever, we need more government intervention to pick up the slack in the economy, the current procedural maneuverings and offerings that the Republican debt ceiling negotiators are proposing can only mean one thing: more austerity is on the way and they want to minimize the damage.

With the oncoming passage of a debt ceiling increase in the next couple of days, it seems that a balanced Budget Amendment is still being discussed amongst the Republican caucus (though if Boehner wants moderate members of the House Democratic caucus to vote for this he may have to give it up), which is a definite form of worrisome discretion. The small bit of scary rule writing comes in the form of a trigger that I have talked about here that, according to Ezra Klein of the Washington Post, will automatically lead to spending cuts, not tax increases. However, there is a grey area on the largest bit of rules politicking in this bill. In short, a “Super Committee” will be created (12 people, 6 from each party including 3 from each House for each party) to make recommendations on deficit reduction. However, these committees have a history of not working too well, essentially failing where the discretion of policymakers tends to fail; with an inability to reach an agreement. If the committee fails to reach an agreement, a whole other set of actions take place, which may end up being more favorable to Republicans. All in all, the murky, more esoteric rules that are written into this agreement may end up mattering more than most think. Stay tuned, only time will tell whether rules trump discretion, or if the politicians can negotiate their way out of these new constraints.