A Path out of Gridlock? Perspectives from Senator Evan Bayh

Senator Bayh served in Congress for two terms as a Democratic senator from Indiana. Prior to that, he served two terms as Governor of the State of Indiana following a position as Indiana Secretary of State. A noted moderate Democrat, Bayh now comments on political events and advocates for bipartisan policies with the No Labels Association. 

You’ve spoken often about congressional gridlock. Has the elimination of earmarks made it harder for legislators to horse-trade and make deals?

The elimination of earmarks has had an effect at the margins, but I don’t think it’s central to the problem. It helps strike a compromise anytime a party has something they care about as part of the compromise, and if a particular project rises to that level for a member, that can facilitate compromise. However, the broader themes I’ve spoken about in the past—gerrymandering, the legacy of Citizens United, hyper partisanship, and focus on party unity rather than amity between congresspersons—are really driving the gridlock. Episodically it can help, but it’s rare that on a major piece of legislation someone will change their heart-felt conviction based on a bridge or sewer or something like that.

You have also spoken about the need for deficit reduction, both on your own and as part of the No Labels organization. In a time of slow economic growth and widening inequality, how can this be achieved equitably?

The first thing we need to do is to try and maximize economic growth. The revenue effect of even marginal increases in economic growth is amazing. That’s the first place to look. After that, the sequester has put a pretty firm cap on discretionary spending, so you have to look at entitlements, Social Security, Medicare, Medicaid, or raise revenue. But first we should look to maximizing economic growth; that’s far and away the most politically and socially acceptable way to go about reducing the deficit.

How can we adjust the social insurance programs to both cut the deficit while still protecting the more vulnerable members of our society?

There are a number of things you could do. You could means-test Medicare so high-income individuals pay a little bit more. You could do things in Social Security where you protect workers whose lifetime earnings have been below a certain level, but raise the retirement age for wealthier individuals. There are things to do to adjust these programs in a progressive way. It doesn’t mean it will be easy or popular; if it were either of those, it would have been done already.

The important thing is to get started, because relatively modest changes today, when compounded over 30 or 40 years, can go a long way towards solving the problem. If you wait, the changes become a lot more painful and you get to the point where credit markets won’t let you borrow or interest rates will be higher. Our currency will be devalued and it will be a real problem for the country. We are fortunate that we have the world’s reserve currency, but the British pound was once the world’s reserve currency and you can’t take these things for granted.

How can we stimulate economic growth without some upfront government investment, which seems difficult in this political environment?

There are a number of things you can do. For example, we have a contradictory fiscal policy, so what you might do is replace some of the spending cuts over the next year or two with longer-term cuts in entitlements. You could do something like that, which on a net basis wouldn’t add to the debt but could help the economy today.

I think one of the overlooked areas is the role that regulation is playing on stifling economic growth and investment. I can’t tell you how many times I hear business leaders say they’re not going to go forward with an investment or hire additional workers because they don’t know what the rules will be six, nine, or twelve months from now. We could also go a long way with a “Time Out,” which is what No Labels has called for under the name of “Jobs First.” This basically says we are having a stagnant argument in Washington where neither side can cause the other side to agree, so let’s call a time out for a year or so to give businesses some certainty to invest and hire and get the economy moving. The political dysfunction and the regulatory changes are major detractors from economic growth right now.

If I could get your perspective as both a senator and Governor, how has polarization and gridlock affected the states? Are we seeing more policy movement at the state level because of the gridlock in Washington?

Back in the Reagan era they had a fancy word for this: devolution. I used to say that responsibility would devolve to the level of government to which it could devolve no further. Then the poor local communities are just stuck.

Politics at the state level have become more polarized. Some of these independent groups are spending big money to affect local races. I was astonished last fall when I was up near Fort Wayne to meet a state legislator and former mayor who said the Koch brothers’ groups had spent a couple hundred thousand dollars to defeat him in a state representative race, not even a state Senate race! They took him out. A lot of this is trickling down to the state and local level. That said, people tend to hold state and local officials more accountable for getting things done. You’re there, you’re living in the community or reasonably close. I think obstinacy and obstruction would not be tolerated as much at the local level as they are in Washington. People know if their trash is getting picked up or if the potholes aren’t getting filled. It’s harder to make the philosophical arguments that contribute to gridlock in DC.

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