The White House fiscal commission did their job--or at least the co-chairmen did. Co-chairs Alan Simpson, the former Republican Senator from Wyoming, and Erskine Bowles, president of the University of North Carolina and former Chief of Staff in the Clinton White House, recently fulfilled their charge and delivered their set of proposals and possibilities. It was a worthy shot across the bow of the government and Congress on the importance of leadership and strength in addressing the gaping budget deficit.
Sadly, the others appointed to the commission could not get past partisan posturing and wrangling long enough to work toward anything like a larger consensus. And the co-chairs, in presenting their own consensus, may not have gotten everything just right--healthcare, for example, deserved more and better focus. But they provided a good, principled and dispassionate look at the challenge and how it might reasonably be met. They did not shrink from the task. From an article in TPM:
Sadly, the others appointed to the commission could not get past partisan posturing and wrangling long enough to work toward anything like a larger consensus. And the co-chairs, in presenting their own consensus, may not have gotten everything just right--healthcare, for example, deserved more and better focus. But they provided a good, principled and dispassionate look at the challenge and how it might reasonably be met. They did not shrink from the task. From an article in TPM:
They got the dimensions of the problem and the nature of the necessary solutions and sacrifices on the table. In that, they provided us a great service. Congress now has a framework to begin with, something helpful to work from--if and when they are so inclined. And soon after the Simpson-Bowles report, another proposal was presented by an able group led by Alice Rivlin, President Clinton's director of the Office of Management and Budget, and Pete Domenici, former Democratic Senator from New Mexico.
Most of the same areas of focus, reforms and solutions were addressed by both groups, even if there were also differences. And there are other well informed groups and voices echoing those messages. If a general consensus from a dispassionate, experienced and informed array of responsible voices is what was needed to move us toward budgetary integrity, the government and Congress are reading and hearing them. And that includes specifics on moving forward meaningful reform of taxation, social security, Medicare, defense, and other areas. For example, from The Economist:
Mr Obama badly needs to show that he can still lead on domestic policy. He should start by cajoling Congress into an agreement to tackle America's ominous fiscal arithmetic. Conventional wisdom says such an agreement is impossible: the problem is too big, the politics too difficult. But it is wrong to suppose that the deficit is unfixable, as two proposals for fixing it have shown this month (see article). And even the politics may not be totally intractable...
The solution should start with an agreement between Mr Obama and Congress on a target for a manageable level of publicly held federal debt: say, 60% of GDP by 2020. They should also agree on the broad balance between lower spending and higher taxes to achieve this. This newspaper believes that the lion's share of the adjustment should come on the spending side...
Yet, there are good reasons for letting taxes take at least some of the strain. Politically, this will surely be the price of any bipartisan agreement. Economically, there is sensible room for manoeuvre without damaging growth. American taxes are relatively low after the reductions of recent years. In an ideal world the tax burden would be gradually shifted from income to consumption (including a carbon tax). But that is politically hard—and there is a much easier target for reform.
America's tax system is riddled with exemptions, deductions and credits that feed an industry of advisers but sap economic energy. Simply scrapping these distortions—in other words, broadening the base of taxation without any new taxes—could bring in some $1 trillion a year. Even though some of this would have to go in lowering marginal rates, it is a little like finding money behind the sofa cushions. The tax system would be simpler, fairer and more efficient...
There is legitimate concern that, done hastily, austerity could derail a weak recovery. But this strengthens the case for a credible deficit-reduction plan. By reassuring markets that America will control its debt, the government will have more scope to boost the economy in the short term if need be—for instance by temporarily extending the Bush tax cuts...[Emphasis added.]
On pensions [i.e., social security], the solution is clear if unpopular: people will need to work longer. America should index the retirement age to longevity and make the benefit formula for upper-income workers less generous. The ceiling on the related payroll tax should be increased to cover 90% of earnings, from 86% now.
Health-care spending is a much tougher issue, because it is being fed by both the ageing of the population and rising per-person demand for services. Richer beneficiaries should pay more of their share of Medicare, while the generosity of the system should be kept in check by the independent panel set up under Mr Obama's health reform to monitor services and payments. The simplest way for the federal government to restrain Medicaid would be to end the current system of matching state spending and replace this with block grants, which would give the states an incentive to focus on cost-control.
Devising a plan that reduces the deficit, and eventually the debt, to a manageable size is relatively easy. Getting politicians to agree to it is a different thing. The bitter divide between the parties means that politicians pay a high price for consorting with the enemy. So Democrats cling to entitlements, and Republicans live in fear of losing their next party nomination to a tea-party activist if they bend on taxes. Even the president's own bipartisan commission can't agree on what to do.
But true leaders turn the hard into the possible...
--"Sorting out America's fiscal mess is relatively easy; what's needed is political courage," Leaders section, The Economist (11.18.10)
So, what kind of response have we heard from the congress, or at least from various Republicans and Democrats that populate it? This editorial from the Boston Globe appears to have captured the spirit of the responses:
THE DEBATE over reducing long-term federal spending got off to a rocky start this week when several Democratic leaders flatly rejected proposals by the leaders of a deficit commission to adjust Social Security, including a rise in the age of eligibility. Whatever the merits of the draft report cobbled together by Democrat Erskine Bowles and Republican Alan Simpson, deficit reduction is too important to have a major entitlement program like Social Security taken off the table...
While most Republicans in Congress have taken a more wait-and-see approach to the Bowles-Simpson report, the likely next chairman of the House Ways and Means Committee, David Camp, is as unbending on tax increases as the Democrats are on Social Security cuts. The Michigan Republican, himself a member of the Bowles-Simpson panel, told Bloomberg Television that Congress should forswear tax increases. "If we raise revenue,'' he said, "we'll never get to the reductions in spending that we need to see to have a more sustainable government.'' Under the proposal by Bowles and Simpson, about a quarter of deficit reductions would come from higher taxes, and three-quarters from spending cuts...
It's easy to see what's happening here. The political message of the last few elections has been that adamant stands carry the day, be they Democratic refusals to discuss changes to Social Security or Republican refusals to consider comprehensive reforms of health care ("socialism'') or immigration ("amnesty''). It's more than a recipe for gridlock: It's a serious misreading of the public will. Voters are desperate for pragmatic solutions to taxes, Social Security, health care, and immigration, and want their representatives to engage with each other. Of course, those same voters should be more rigorous about assessing blame: Another of the lessons of the last three election cycles is that any politician who sticks his or her head out is likely to get it cut off.
The mission of the deficit commission was to provide a framework for compromise that would get members of Congress off their ideological toadstools, primed for serious action on the deficit. Sadly, the Simpson-Bowles report, and its reception by key leaders this week, evoke more skepticism than optimism.
--"Deficit panel offers toughness, but political deadlock remains," Editorial, Boston Globe (11.13.10)
And if that is not discouraging enough, things look darker still when we test the Boston Globe's views on what the electorate was really saying and what people really want. Is there really a "serious misreading of the public will"? Are "voters desperate for pragmatic solutions to taxes, Social Security, health care, and immigration, and want their representatives to engage with each other"? It depends on what you think that means. If you think it means support for the deficit reduction proposals of the fiscal commission and others, you may want to rethink that. As it turns out, a recent NBC/WSJ poll of people's attitudes toward the recommendations of the Simpson-Bowles commission, and similar proposals, indicates that the Boston Globe may have it wrong. The sad and dispiriting findings:
NBC/WSJ poll shows the country is united at last -- against the deficit-reduction proposals…
*** Unity at last -- against the deficit-reduction proposals:Want to know why the Bowles-Simpson, Domenici-Rivlin, or Schakowsky plans to reduce the deficit/debt are unlikely to go anywhere? Just look at these results from our new NBC/WSJ poll. While 66% of voters in the survey say cutting spending was a "major" reason in their support of a candidate in the midterms, a whopping 70% of adults say they are uncomfortable with cuts to Medicare, Social Security, and defense programs -- which just happen to be the biggest sources of federal spending. Another 59% say they're uncomfortable about raising taxes (on gasoline, for example) or changing the tax code (like eliminating deductions on home mortgages) to reduce the deficit. And another 57% are uncomfortable about raising the Social Security retirement age to 69 by 2075 to reduce the deficit. Said NBC/WSJ co-pollster Bill McInturff (R): "We found a way to unite everybody -- which is producing a deficit commission that managed to irritate every different political constituency." What was even more amazing about this data: Fully 36% of EVERYONE we surveyed said they were uncomfortable on all THREE facets of the debt commission proposals. Nearly half of that 36% are African-American (46%) and the other half, self-described conservatives (46%).
"First Thoughts: Unity at Last," Chuck Todd, Mark Murray, Domenico Montanaro, Ali Weinberg, NBC News First Read (11.18.10)
So that's what we've come to. That's who we are. Ironically, as our young soldiers and Marines continue to sacrifice their lives and limbs for their nation, to most Americans back home, citizenship, civic duty, and sacrifice now means first securing their own prerogatives and entitlements, and not having to pay for them. This is how we do our part. And pandering to this unsustainable delusion is how statesmanship, leadership is rendered by our Congress. It's an empty feeling, isn't it.
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