WASHINGTON — Suggestions released this week on how to slash the nation’s $1.3 trillion annual deficit – from raising the gas tax and retirement age to capping the mortgage interest tax deduction – ran into the same problem almost every other deficit reduction plan has: There’s little (if any) chance it could pass.
Reaction from the Minnesota delegation to a draft report by the co-chairs of a bi-partisan deficit reduction came in two flavors: 1) We haven’t studied it yet; and 2) Well… it’s a start, but let’s wait for the full report before commenting further.
Rep. Tim Walz’s spokeswoman Sara Severs noted that Walz “was a staunch supporter of [starting] the commission because he believes tackling the national debt is absolutely vital and believes it should be done in a bipartisan way, putting politics aside.” Walz hasn’t read the full thing yet, but Severs said he views the release as “an opportunity to begin a conversation about how best to reduce debt and deficit.”
“This is a starting point which is productive,” agreed Bill Harper, chief of staff to Rep. Betty McCollum. “There is a long, tough road ahead.”
If enacted en banc, the cuts and tax code changes outlined by former Clinton Chief of Staff Erskine Bowles and former Wyoming Republican Sen. Alan Simpson, co-chairs of the 18-member National Commission on Fiscal Responsibility and Reform, would cut deficit spending in half by 2020.
It’s not the full story though — to fully eliminate the deficit in that timeframe, the economy would have to grow at a much more rapid pace than it currently is and Congress would have to approve even deeper cuts and larger tax hikes than the ones presented.
I looked long and hard to find a single example of any returning representative or senator who fully endorsed the plan. Such a lawmaker, at this point, doesn’t exist.
Many took the tone Senate Majority Leader Harry Reid did when he said: “While I don’t agree with every one of their recommendations, what they have provided is a starting point for this important discussion.”
Meanwhile, House Speaker Nancy Pelosi led a large group of liberals in stark opposition to the plan. This proposal is simply unacceptable,” she said, because it violates the “bedrock promises” made to seniors in the form of Medicare and Social Security.
Even President Obama, who formed the commission, kept his distance.
“The President will wait until the bipartisan fiscal commission finishes its work before commenting. He respects the challenging task that the Co-Chairs and the Commissioners are undertaking and wants to give them space to work on it,” White House spokesman Bill Burton said. “These ideas, however, are only a step in the process towards coming up with a set of recommendations and the President looks forward to reviewing their final product early next month.”
Long-time White House reporter Keith Koffler, founder of the conservative news website White House Dossier, translated those comments from Washington Speak:
“We’ll let this trial balloon float and see if it pops, but in the meantime we’ll get about as close to it as we would a stinky steaming pile of fresh manure.”
The problem, and the problem with passing any solution
Meanwhile, the national debt keeps rising. It hit $13 trillion earlier this year and will blow past $14 trillion in early 2011. By 2020, if nothing changes, it will hit $20 trillion.
By 2050, if no serious tax hikes or cuts are made, the entirety of the U.S. government’s revenues will be spent on just three things: Medicare/Medicaid, Social Security and interest payments on the national debt. Not principal — just interest. Every dollar spent on national defense or national parks, for example, would have to be borrowed.
And that can’t work. On that statement, Washington seems in rare agreement.
“America cannot be great if we go broke,” Bowles and Simpson wrote. “Our economy will not grow and our country will not be able to compete without a plan to get this crushing debt burden off our back.
“Throughout our history, Americans have always been willing to sacrifice to make our nation stronger over the long haul. That’s the promise of America: to give our children and grandchildren a better life.
“American families have spent the past 2 years making tough choices in their own lives. They expect us to do the same. The American people are counting on us to put politics aside, pull together not pull apart, and agree on a plan to live within our means and make America strong for the long haul.”
It’s important to note, for process sake, that this is not a recommendation by the commission. Fourteen of the panel’s 18 members must agree on a set of recommendations for them to be labeled the work of the commission.
And never mind that supermajority — analysts say the commission may not get enough votes to put anything forward at all. From Ezra Klein at the Washington Post:
Increasingly, the concern looks to be moot: The National Commission on Fiscal Responsibility and Reform will not get agreement from 14 of its members. It might not even get a majority. Today’s release, unexpectedly, is a draft proposal from the co-chairs, and that might be as close as the commission comes to a comprehensive product. “This is not a proposal I could support,” said Rep. Jan Schakowsky, one of the members. Rep. Jeb Hensarling, another participant, was less definitive, but nowhere near supportive. “Some of it I like,” he said. “Some of it disturbs me. And some of it I’ve got to study.” The full commission is expected to debate the proposal over the next week.
Let’s say for argument’s sake that the commission does the impossible and finds a way to agree on recommendations – that brings us to point two: The deficit-reduction commission has literally no power to implement its plans at all.
Obama originally wanted this commission set up through the legislative process, along with the caveat that the commission’s recommendations be guaranteed an up-or-down vote in Congress. Having a Congressionally-authorized panel would have given the commission more weight, but also would have prevented any recommendations from being characterized as coming from “the president’s” commission.
That didn’t happen — there weren’t the votes to even form the thing on the GOP side of the aisle.
And now with a blueprint of unpopular suggestions that have seemingly pushed a good number of the Democrats away, the White House keeping its distance and no one leading the charge for its passage, the commission’s report looks dead even before arrival.
Further reading on this subject:
The commission co-chairs’ report is here.
A bullet-point list of cuts and tax changes is here.
Analyst Stan Collender makes perhaps the most cogent critique, not just of the report, but of the whole process here.