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Minnesota delegation mum on deficit-reduction report, but there’s little chance plan will pass anyway

President Barack Obama, speaking in the Rose Garden earlier this year, is flanked by panel co-chairs Erskine Bowles and Alan Simpson.
REUTERS/Yuri Gripas
President Barack Obama, speaking in the Rose Garden earlier this year, is flanked by panel co-chairs Erskine Bowles and Alan Simpson.

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.

Related content

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

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Comments (16)

  1. Submitted by Hiram Foster on 11/12/2010 - 11:27 am.

    I think there is a fundamental lack of trust. Let’s assume that we take the deal offered here. Social Security and Medicare cuts in exchange for higher taxes on the rich. What guarantee is there, that the Congress and the federal government will keep it? More specifically, once Social Security benefits are cut, particularly in this form, increasing the age of eligibility, it will hard to ever raise them again. On the other hand, any tax increase on the wealthy will immediately become the target of efforts to reduce them again. And the people who will mount those efforts will always have the political power to overcome whatever opposition there might be. And it’s not as if you have to go way back in history for examples of this. In the face of huge deficits, decried by Tea Parties across the nation, a Democratic, allegedly anti business president and Congress are about to allow the Bush era tax cuts on the wealthy, which are primary contributors to the deficit, to continue.

  2. Submitted by Steve Rose on 11/12/2010 - 01:07 pm.

    “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 …” No surprise that Pelosi led the denialcrat charge.

    According to the Office of Management and Budget, the United States provided over $6.3 billion taxpayer dollars to the United Nations in 2009. Less than half ($2.7 billion) of that total went to assessed dues; the balance was charity. As a nation, we need to stop borrowing and stop printing money to give away. The sooner we attack our defict/debt position, the more manageable it will be. If we wait until we are 20 trillion dollars in debt, we will be in a position to have no help from growth.

  3. Submitted by Glenn Mesaros on 11/12/2010 - 02:29 pm.

    It was disclosed yesterday that the so-called independent Presidential Commission on Fiscal Responsibility and Reform, widely known as the “Catfood Commission”, is actually owned and paid for by the Peter G. Peterson Foundation. Specifically, the salaries of two senior staff members, Marc Goldwein and Ed Lorenzen, are paid by private groups that have previously advocated cuts to entitlement programs. Lorenzen is paid by the Peter G. Peterson Foundation, while Goldwein is paid by the Committee for a Responsible Federal Budget, which is also partly funded by the Peterson group, which is a Wall Street Hedge Fund.

    Not accidentally, one of the first words of praise for the Bowles-Simpson report came from the Committee for a Responsible Federal Budget, a Peterson-funded group. On the day the report was issued, NPR invited one person on the air to comment—David Walker, the CEO of the Peterson Foundation.

    The foundation also held a news conference the same day that the report was issued at the Columbus Athletic Club in Ohio to announce a $6 million “OweNO” campaign in Ohio and Colorado.

    The ads feature a candidate Hugh Jidette — a play on “huge debt” — who is a fictional presidential candidate.

  4. Submitted by Steve Rose on 11/12/2010 - 02:32 pm.

    I think I understand what Speaker Pelosi means by “bedrock promises”. We will continue on this reckless course of debt and deficit until we are living in the same conditions as the FLINTSTONES. That is the Bedrock promise.

    It seems that she is denying the problem, as she says NO, but offers no alternative solutions. As the New York Times editorial page stated, it is time for her to step aside

  5. Submitted by Arvonne Fraser on 11/12/2010 - 02:52 pm.

    This Bowles-Simpson set of suggestions at least gives us something to talk and think about. It should prompt some good conversations. It was never meant to be voted on in toto. To support or dismiss it is not the point. It’s time we started talking about issues instead of political horse races.

  6. Submitted by Bernice Vetsch on 11/12/2010 - 04:56 pm.

    Thank you, Mr. Mesaros, for background info on the commission’s sponsors.

    Some of the commenters here don’t seem to understand that Social Security isn’t a gigantic monthly sum that makes folks rich. Many seniors, especially women who did not work outside the home or who worked at low-wage jobs, get only about $500 per month and can survive only with rent subsidies and free health care through Medicaid. Many get $1,000-$1,500 which, with rents as high as they now are, don’t leave much disposable income after housing, utilities, food and medication are paid for.

    If benefits for future retirees are reduced, the people adversely affected will be those among the current millions of unemployed, or those who do not graduate from high school, or college students who will graduate with huge debts and find the only jobs available are those at their favorite coffee house. It is unlikely that members of these groups will be able to establish savings accounts of any amount sufficient to make their retirement years comfortable. They will need every social security dollar they can get.

  7. Submitted by Richard Schulze on 11/12/2010 - 07:09 pm.

    Those who are in a great sweat about immediate deficit reduction are merely trying to “Starve the Beast”, the “Beast” being defined as a government not controlled by the GOP.

    We need to get serious about medical costs, first and foremost.

  8. Submitted by Steve Rose on 11/12/2010 - 08:36 pm.

    Don’t forget that this is President Obama’s Deficit Reduction Commission. The naysayers disparage it as some sort of vast right wing conspiracy to deprive Americans of housing and health care.

    Unless continuing to borrow and print money (monetize the debt) is a solution, offer an alternative to the commission’s recommendations.

  9. Submitted by Richard Schulze on 11/12/2010 - 10:15 pm.

    Well for starters, the GOP has their “Pledge to America” which does a much better job of pointing out the problems facing America than it does of solving them, and for good reason. It was an electoral document, designed to win votes. As such, it is so much sugar and so little sacrifice.

    But most of the problems facing America will require solutions—whether it be increasing the retirement age, cutting Medicare, cutting defense spending or raising taxes—that cause real pain. Eventually, one of the parties will have to inflict it.

  10. Submitted by Steve Rose on 11/13/2010 - 11:29 am.

    As the title of this column tells us about the draft plan from the President’s commission, “there’s little chance plan will pass anyway”. If they must talk people in off the ledge regarding this “little chance” plan, what chance does the GOP pledge have of being implemented. I would give it a much less than little chance.

    The cuts must come from everywhere. Pare every budget back, develop a tolerance for whining, and take a sledge hammer to Pelosi’s “bedrock promises”.

  11. Submitted by Richard Schulze on 11/13/2010 - 06:34 pm.

    I expect both parties in congress to come up with alternatives which will be notable mostly for the speed with which the other party rejects them. But they should be warned. Obama and the Republican house are both on probation. If they don’t make real attempts to govern competently, their time will end in 2 years. I’m not optimistic, but there are many good ideas in this proposal, which may lead to something constructive in the long run.

  12. Submitted by Bernice Vetsch on 11/14/2010 - 03:42 pm.

    A commenter on a Common Dreams article about this topic noted that the two chairs (one Republican, one faux-Dem) released what they called the commission’s recommendations — except that only the two chairs prepared the final report. The other members of the commission weren’t even allowed to approve or disagree with them.

    Neither the other members nor the White House was advised of the coming release.

    These co-chairs seem to have caught the same Disease that American right-wingers, England’s Cameron, France’s Sarkozy and, to a certain extent, Germany’s Merkel have caught. They think the way to end a recession and give the economy a boost is to deliberately cut public spending, thereby shrinking the economy further and making matters worse.

    In their countries, people take to the streets. In England, students who were told their tuition hikes would be gigantic have organized a movement to oust/recall Nick Clegg — the Liberal Democrat head who aligned his party with Cameron’s Tories and has gone along with Cameron’s plans (plots?). The Guardian has received secret e-mails showing that Clegg assured Cameron that he would back off on his promise to students that he would not go along with a tuition rise.

  13. Submitted by Richard Schulze on 11/14/2010 - 09:58 pm.

    The bipartisan commission was the President’s idea and championed by him – to ignore its recommendations would only further damage his credibility and moral authority on the issue.

  14. Submitted by Steve Rose on 11/14/2010 - 10:24 pm.

    The annual college tuition in the UK is capped at $4800. It has been that amount for a long time. Let’s deny that the cost of education has increased over the years. Why not provide it for free? Make someone rich pay for it.

  15. Submitted by Glenn Mesaros on 11/15/2010 - 07:02 am.

    Wall Street hedge fund manager Peter Peterson runs the deficit “Catfood Commission”. Since cashing out $2 billion from the public offering of the Blackstone hedgefund, Peterson’s public mission has been to devastate the General Welfare capacities of the American nation by revenue and budget cuts on a huge scale, most drastically to Social Security and medical care. His foundations control not just the Catfood Commission, but at least two other overlapping commissions whacking at U.S. budgets — the Bipartisan Policy Center group led by Felix Rohatyn pal Alice Rivlin; and the New America Foundation’s Committee for a Responsible Federal Budget. As one magazine profile of the elderly Peterson observed, “Peter Peterson has been doing a lot of thinking lately about the end of life — not his, yours.”

    Read the new book, “Hellhound of Wall Street: How Ferdinand Pecora’s Investigation of the Great Crash Forever Changed American Finance.” to see how American patriots dealt with such people in 1933.

  16. Submitted by Steve Rose on 11/15/2010 - 09:20 am.

    White House press release, February 18, 2010; President Obama: “For far too long, Washington has avoided the tough choices necessary to solve our fiscal problems – and they won’t be solved overnight. But under the leadership of Erksine and Alan, I’m confident that the Commission I’m establishing today will build a bipartisan consensus to put America on the path toward fiscal reform and responsibility. I know they’ll take up their work with the sense of integrity and strength of commitment that America’s people deserve and America’s future demands.”

    Thus, the foundation was established back in February for President Obama’s right-wing Catfood Commission. I see it more as a way to off the debt and deficit express to the catfood diner for all Americans.

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