The ongoing irresolution of the fiscal challenge by President Obama and the U.S. Congress suggests to any sober minded person that politics as usual in our adversarial democracy, where different constituencies of the body politic are passionately mobilized against each other, cannot solve the problem.
To do so, we need to return to the ideas of the American Founding Fathers. They sought to design institutions that could forge consensus, unity of purpose and the capacity for addressing long-term problems out of the cacophony of voices and contending interests that democracy by its nature generates.
FAIR BUT SHORT-TERM FIXES
Let's start with where we are now. The half-portion of the cliff deal so far has been Obama's tax hikes on the rich, leaving the Bush-era lower rates for the rest that will lock in an insufficient revenue stream to cover future costs -- even though the whole idea was to start cutting down the long term debt load. Sorting out those cuts and the related "debt ceiling" issue are the looming crisis ahead.
Obama's tax cuts didn't dent America's long-term structural challenge any more than Governor Jerry Brown's tax increases on the rich in California addressed the fundamental dynamics of the state's dysfunction. In fact, by perching the state's budget on a tiny tax base, the Governor has planted the seeds of the next crisis. The top 1 percent will now pay nearly 50 percent of all income taxes, the main source of state revenues. If the Dow dives, revenues will plummet. (To his credit, we must add, Governor Brown has also stated in no uncertain terms that "fiscal responsibility is not the enemy, but the predicate, of democratic governance" and vowed to hold the line on overspending as new revenues come in.)
Yet, in a society edging toward plutocracy, both Obama's and Brown's tax measures are nonetheless the necessary precondition for real reform of those entitlements that propel the burgeoning fiscal crisis at both the federal and state level and suck up resources for investment in the future.
Nationally, the top 1 percent hold 40 percent of all wealth; the bottom 80 percent hold 7 percent. In California, while the top one percent earned 8 pe cent of all income when Brown was governor in the 1970s, today they account for 22 percent.
Rightly so, most Americans are in no mood to make any sacrifice to adjust their promised social benefits on behalf of investment in the future if the plutocrats are left off the hook. At the same time, soaking the rich alone is not going to renew the clogged meridians of mobility and opportunity for most Americans. In the end, a society only works if everyone who shares the benefits also bears the costs.
The tough choices ahead will not only pit the future against the top, but also against the vested interests of the aging middle class.
The central structural challenge across the West is that the actuarial demands of the maturing welfare state and, in the U.S., baby boomers headed toward retirement and infirmity will swamp public finances, leaving little to spare for investment in education, R & D and infrastructure.
In 1975, Medicare, Medicaid and Social Security comprised 25 percent of the federal budget. Yet in the years ahead the number of seniors entitled to these benefits will almost double what it was when Ronald Reagan was president. By 2025, these costs are expected to eat 40 percent of federal spending.
Inevitably, America will also have to shed a good chunk of defense spending and shrink its global military presence.
Further, these mounting costs don't exist in a vacuum, but in an ever more competitive global environment. Germany's chancellor, Angela Merkel, has put the issue squarely for Europe, but it applies to the U.S. as well. Today, she says, Europe accounts for 7 percent of the world's population, 25 percent of global production and 50 percent of social spending. Clearly, as the rise of the rest from China to Turkey to Brazil erode the West's share of global product, it will be ever tougher to maintain the welfare state unless sustainable adjustments are made that tame the rising cost of benefits, but also entail investment and productivity improvements.
VETOCRACY AND DIET-COKE DEMOCRACY
How will our wildly contentious system of governance ever be able to face the facts and make the tough decisions? We can't even effectively regulate Wall Street after a crash that sent us into near depression or ban assault weapons after a massacre of school children.
Unless democracy in the U.S. or, indeed, across the West can find a way to forge consensus, unity of purpose and the determination to resolve long-term challenges, it will end up on the wrong side of history.
Today our industrial democracy, which once invested in the future and financed the safety net, has given way to a consumer democracy in which all the feedback signals -- the media, the market and politics -- steer behavior toward immediate gratification. We've become a Diet-Coke culture in which people seem to want consumption without savings and government without taxes, just as we want sweetness without calories.
The formal mechanism of accountability -- one person, one vote elections -- has also been captured by the ' vetocracy' of special interests, from the gun lobby to the financial lobby to teacher's unions in various states. Over the years they've accreted to the system like barnacles and have the organized clout to protect their spoils and block any threat to the status quo.
Wary of such an outcome, the American Founding Fathers understood that deliberative institutions and practices were necessary to "enlarge the public view." Otherwise, as they rightly feared if today's dysfunction is any measure, the republic would succumb to the tyranny of the voting public's short-term mentality and the vetocracy of organized special interests, which they called "factions."
As we point out in our book, Intelligent Governance for the 21st Century, the Federalist Papers make it clear that the Founding Fathers eschewed the kind of direct rule by citizens practiced in ancient Greece in favor of a mixed constitutional system that combined knowledgeable democracy with accountable meritocracy. They understood that the institutional capacity for sober deliberation beyond the political fray to sort out the trade-offs among contesting interests for the common good is as essential a feature of good governance as one person, one vote elections.
Thus, in their original design, a government rooted in popular sovereignty would delegate authority to an unelected Supreme Court, an indirectly elected Senate (elected then by state legislatures), a selected electoral college to "enlarge the views" of the public in choosing a president and, later, a central bank governed by appointed experts insulated from politics. All were meant to check and balance the immediate passions, factions and constituent interests of the elected House of Representatives.
To correct the present dysfunction, we need not only to revisit the political philosophy of the Founders and place it in the framework of the 21st Century; we also need to engage in the actual institutional design of what a mixed liberal democratic constitutionalism might look like.
ENLARGING THE PUBLIC VIEW
While the world's leading democracy stews in its own gridlock, others are charting innovative paths. Most notable has been the experiment with an unelected technocratic government in Italy. Last year, economist and former European Commissioner Mario Monti was appointed as prime minister by Italy's president to stabilize that country's finances in the eurozone crisis. Having done so successfully in his temporary depoliticized government, Monti has stepped down and declared he will now stand as an elected prime minister -- but only if a centrist coalition that supports his long-term reform agenda can win a majority that allows him to put in place a government of "merit and competence." (In his campaign, Monti pointed out that his unelected government was able to accomplish what Washington has not).
In California, we established an independent, non-partisan group of eminent citizens called the Think Long Committee to hash out long-term reforms to the state's tax code and initiative process outside the political arena and present them to the public for a vote. That group includes labor leaders and advocates for the poor as well as former governors and assembly speakers along with the likes of Google's Eric Schmidt, former Secretary of State George Shultz and the former chief justice of California's Supreme Court.
Among its proposals is the establishment of what journalist Joe Matthews calls "a 3 ½ branch of government" -- a non-partisan body of citizens with experience and expertise appointed by the governor and legislature that would stand between elected officials and the unique direct democracy of California's initiative process. This council would propose long-term solutions to what ails the Golden State. Its deliberated proposals would be submitted as ballot measures for consent by the voters.
Unlike California, where the constitution is regularly amended, the U.S. Constitution is difficult to change -- despite Thomas Jefferson's own view that it should be revamped every generation because "the living, not the dead" should make the rules by which they are governed.
But here too, there is room for innovation. Noting that the bipartisan Congressional "super committee" set up to address the long-term deficit failed because it was made up of elected members of Congress, MIT professor and Nobel laureate Peter Diamond has suggested another approach.
His idea draws on the successful experience of the military base-closing commissions after the wind down of the Cold War. These commissions -- appointed by Congress but made up of independent citizens and experts not beholden to electoral constituencies -- were tasked with shutting down or shrinking military installations, which are prized assets of elected officials everywhere. The commission's recommendations could not be amended, but only voted up or down. This removed the political risk to elected officials who would otherwise lack the resolve to take on their constituents' interests -- and risk their political future -- for the good of the country as a whole. Each recommendation resulted in a base closure.
Diamond now proposes a similar set of "narrowly-targeted commissions" to make the tough choices elected politicians are incapable of making, whether that involves redesigning Social Security, cutting Medicare costs, slimming down the defense budget or figuring which tax expenditures to forego.
The commission proposals would then be subject to an up or down vote in the Congress with no amendments, just like the base-closing recommendations.
EQUAL TO THE FOUNDER'S SPIRIT
Surely, there are many other possible arrangements that introduce depoliticized institutions, temporary governments or commissions that bolster democracy's capacity to "enlarge the public view," forge consensus, unity of purpose and the long-term implementation of sustainable policies.
Its time to update the genius of America's Founding Fathers to fit our present circumstances. If we can't manage to be equal to their spirit, the democracy they so carefully crafted is bound to falter.
Nicolas Berggruen and Nathan Gardels are co-authors of Intelligent Governance for the 21st Century: A Middle Way Between West and East (PolityPress/Wiley, 2013).