When gridlock can be a friend

"It's not the end of the world if we don't have [a resolution] this year," Mr. Bixby says.

But the congressional standstill on a budget has a cost. "One of the problems with a big deficit is it has its biggest impact on the most vulnerable programs," Bixby adds.

These tend to be programs without the backing of powerful lobbyists and campaign contributors. That is, domestic "discretionary" programs that tend to benefit the poor and the middle class. These get trimmed while Congress favors more powerful lobbying groups.

The House, for example, voted last week on legislation providing corporate tax breaks that would add an estimated $278 billion to the deficit over the next decade. That's somewhat more than the $270 billion in corporate tax concessions approved by the Senate in May, reckons Citizens for Tax Justice, a Washington research group. The bills include measures that will offset most of the revenue losses from the tax "giveaways." But these "shouldn't be taken very seriously," holds Bob McIntyre, director of CTJ.

Deficits do concern Federal Reserve Chairman Alan Greenspan. During his confirmation hearing in the Senate Banking Committee last week, for a fifth term, Mr. Greenspan repeatedly called for Congress to restore a "pay-as-you-go" budget procedure as it existed prior to 2002. That rule required any new spending or tax-cut proposal to be revenue neutral. A tax cut in one area, for example, would have to be offset by an equal hike in taxes elsewhere or spending cuts.

As usual, senators of both parties were trying to press the famed central banker for a statement favoring their particular position. Democrats were pleased that Mr. Greenspan urged a "symmetrical" pay-as-you-go rule - one that applied to both spending and tax decisions as well as "triggers" that would end some tax cuts in a time of bad deficits.

They were less happy that Greenspan also spoke of "discretionary spending caps" that, Mr. Kogan and others note, could hit Social Security, Medicare, veterans disability compensation, the Supplemental Security Income program for the elderly and disabled poor, health and retirement programs for federal civilian and military personnel, and ultimately Medicaid and some other entitlement programs.

One immediate problem of the stalemate is the pressing need to raise the statutory limit on public debt. This is supposed to put a ceiling on the amount of bonds, bills, and other debts the Treasury can sell to the public to get the revenue necessary to pay the bills tax revenues fail to cover. That ceiling will soon be reached, and Congress may have to scramble to avoid a government shutdown.

But for the moment, the extreme level of partisanship in Congress means its members cannot hammer out a compromise budget. This, oddly, is helping to keep federal spending down. As one analyst puts it: "Gridlock is your friend."

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