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Alan Simpson, the deficit, your grandkids, the chickens and the grit

Long-time deficit- and debt-hawks like me always assume we will have our hearts broken, and despite the creation of a new bipartisan deficity reduction panel and despite the brilliant choice of former Sen. Alan Simpson as co-chair, it’s safest to assume that more heartbreak and intergenerational pillaging is ahead.

The national government is and has been, almost without interruption for 50 years or so, on an unsustainable fiscal course that threatens future generations with an economy-crushing mountain of debt. The basic problem has been in place almost since the baby-boomers were born.

(The centrality of the sheer size of the boomer generation to the problem is often overstated. We boomers will pass from the scene eventually. But the increases in life expectancy are not going away. This is, of course, mostly good news. But its impact on the ratio between workers and retirees, and on the long-term cost of the big entitlement programs, is here to stay and to grow.)

Yes, I know about the military budget, too. I’m such a dove that I go out of my way to call it “military” spending, rather than “defense.” Think about it. The Defense Department was the Department of War for most of U.S. history until some post-World War II marketing geniuses decided to reframe what that was about. Every time we call it the defense budget, we are engaging a bit of Orwellian self-brainwashing. But liberals are kidding themselves if they think military spending is as big a cause of the unsustainable fiscal picture as the entitlement programs.

So, as you have heard, after the Repubs shamefully refused to go along with a deficit-reduction panel that would have had real teeth, President Obama has decided to do what he could do by executive order and has named a new panel to recommend a long-term strategy of deficit and debt reduction. Because Congress didn’t agree in advance to an up-or-down vote on the panel’s ultimate report, Congress will be relatively free to ignore the panel’s ultimate recommendations.

But the best news was that Pres. Obama chose as the Repub co-chair of the panel former Wyoming Sen. Alan Simpson. Simpson was once considered a mainstream conservative Republican, chosen by his fellow Repubs as their whip. He is a fiscal conservative from back when fiscal conservatism meant what it was supposed to mean — someone who was serious about balancing the budget. (That term, in case you haven’t noticed, has also undergone a huge Orwellian rebranding since the Reagan years. It now means someone who pretends to be concerned about the deficit but constantly advocates tax cuts that will make the deficit higher.)

Last night, fresh from the announcement of the commission’s creation, Simpson and his Dem co-chair, former Clinton White House Chief of Staff Erskine Bowles, sat down with Judy Woodriff on the estimable “PBS NewsHour.” I’ll post the video below.

From the first time the camera hit Simpson, I had the feeling that adult supervision had arrived. Simpson is 79 and, to tell you the truth, he looks older. He left the Senate voluntarily in 1996 and this is not the first time he has interrupted his retirement to do one of these bipartisan no-bull deals. (And not on easy subjects. He was on the Iraq Study Group and he is a co-chair of the bipartisan Americans for Campaign Reform.)

From his Senate days, I remember him as being humorous, in a Bob Dole way, making fun of himself and everyone else and of the b.s. that imbues Washington. And in the interview last night, he announced that humor would be the toool with which he would deal with the attacks to come. But they will come, because Simpson and Bowles are as serious as two heart attacks about what it will take to deal with the deficit/debt issue. Namely: EVERYTHING.

They both said it. Everything that will reduce the deficit has to be on the table. Entitlement cuts. Tax increases. Even tax increases that hit the middle class. And every single category of spending. As Bowles said, the effort will fail if anything — anything — is ruled off the table.

For those who are won’t watch the video, here are a few of Simpson’s wisecracks:

He called the assignment “a suicide mission.” But cracked that he was taking Bowles down with him. When Woodruff asked him what about the Republican dogma that tax cuts are actually a form of deficit reduction since (on Planet Mars) they pay for themselves. Simpson: “I’m not smoking that same pipe any more.”

He predicted that “Rushbabe will be after me day and night.”

He called the long-term future fiscal problem “an engine coming down the track with no brakes.” But if it isn’t addressed “this country is going to the bow-wos.” His most juvenile crack (but I’m inclined to be forgiving) was to say of those who are going to use cheap shots and sound bites to derail this serious work: “they’ve b.o., heartburn and gas.”

And lastly, my favorite (and bear in mind that Simpson used to chair one of the Social Security committees in the Senate): “There’s only two ways you can go with Social Security. You can raise the payroll tax or you can cut benefits or you can use affluence testing [me: that’s sorta three ways, but none of them are privatization]. Everything else is just B.S. If people are really ingesting B.S. all day long, their grandchildren will be picking grits with the chickens.”

Here’s the video. The whole thing is 12 minutes long. The interview kicks in about 2:30.

Comments (13)

  1. Submitted by Tim Walker on 02/19/2010 - 12:45 pm.

    This panel must succeed in its task.

    Period.

  2. Submitted by dan buechler on 02/19/2010 - 12:55 pm.

    You should define raising the payroll tax more clearly. After a certain upper limit you don’t pay into the tax. One reason payroll taxes can be regressive and counterproductive to job growth. Even Bill Gates and other wealthy men would prefer to pay more into the fund. The solutions are kinda simple but the political resistance dysfunction is great. Quite elementary but increasingly complex. IRAs were certainly not a good fix/fit for the majority of workers interview Elizabeth Warren for her take. Doubt she has the time as she is high profile. But there are others willing to talk.

  3. Submitted by Peter Swanson on 02/19/2010 - 01:40 pm.

    EB,

    I think you are confusing “fiscal conservative” with “deficit hawk.” The latter would be unlikely to raise the deficit even to fund defense spending or to fund tax cuts. During the Reagan/Bush-I years, when Alan Simspson regularly joined the President for weekends at Camp David, there were plenty of deficits — and a few tax cuts (1981)! But it is nice to see liberal nostalgia for the Gipper. Does your clip file from the Strib reflect a contemporaneous admiration for the Eureka College alumnus?

    Supply siders like Jack Kemp were a subset of fiscal conservatives, as were deficit hawks in the Rudman/Concorde Coalition mold. There is no Orwellian transformation of meaning here. Conservatives can disagree, ya know.

    What you may be getting at is that conservatives fail to live up to their principles in terms of pork and earmarks. That is hardly a new thought, but it is different from saying that the term “fiscal conservative” is Orwellian. I think what you are looking for is the (overused by liberals) word “hypocritical.”

    If you mean that conservatives are the ones advocating for change and liberals want to keep the status quo, well then you might have a point about ideological labels.

  4. Submitted by Peter Swanson on 02/19/2010 - 01:44 pm.

    Oh, and revenues did increase after the Reagan tax cuts, but SPENDING outpaced the revenue increases. The deficit INCREASED after Bush I broke his “No New Taxes” pledge.

    The numbers and the reasons are complicated, but there is nothing Orwellian happening here.

  5. Submitted by Glenn Mesaros on 02/19/2010 - 03:26 pm.

    Who stole the money from the Social Security Fund to pay for the Neo Con “40 years war”? (See book by that title)

    How many people are you willing to kill to balance the budget?

    How come the Federal Reserve can guarantee $23 trillion dollars in Wall Street Bank Debt (official figures by TARP overseer), and we cannot afford medicare and social security?

    We the People of the United States, in Order to form a more perfect Union, establish Justice, insure domestic Tranquility, provide for the common defence, promote the general Welfare, and secure the Blessings of Liberty to ourselves and our Posterity, do ordain and establish this Constitution for the United States of America.

  6. Submitted by Bernice Vetsch on 02/19/2010 - 05:12 pm.

    Yes, Dan B (#2). Raising the cap, the upper limit on which SS taxes are withheld, would be progressive. Just raising the percentage of taxes withheld would only affect those making $100,000 per year or less and would therefore be regressive.

    Making all income subject to a very low- percentage tax would mean Bill Gates, et al, would pay that percentage on everything they earned each year (no exempting investment income, for instance). We could probably avoid all future shortfalls that way.

    All we need is Congression Guts.

  7. Submitted by Tom Anderson on 02/19/2010 - 09:17 pm.

    Why don’t we just impose a very high percentage tax on Bill Gates alone, save the rest of us a lot of money, and solve the shortfall. Until Bill dies. His estate tax will keep us going a few more years and by then global warming will be killing us off in droves eliminating the need for Social Security.

    Seriously, start paying in more, start reducing benefits, raise the ceiling. The solution has been available for decades but without term limits it won’t happen.

  8. Submitted by dan buechler on 02/20/2010 - 12:04 pm.

    #7 you need to get more forage in your diet you are so full of it and yourself just like the “rushbabe” Simpson warned about it. Yes an affluence tax also. A elder relative of mine collected generous social security with no need for it. Once you have politics figured out everything else is easy. I’d be a little anti small d democratic here if it would get us towards solving the problems but we already got the anti people Supreme Court for that. We can’t hope for pie in the sky growth like we’ve been smoking that old 80’pipe (Simpson again) I think I am probably more republican than you in my admiration for these guys and their guts. Got anything good to say. Say it.

  9. Submitted by John E Iacono on 02/20/2010 - 03:57 pm.

    Bernice:

    I was with you on your first paragraph (#6), but I jumped ship on paragraph 2.

    For every Bill Gates there are a thousand small investors who would be hit by your proposal to tax “all income,” from the unemployed to the retired whose Social Security or Railroad Retirement or Pension income to the housewife who holds a garage sale.

    As one who would like the Bill Gates’ of the world to pay all of the taxes so you could have a free ride I am SURE you don’t mean what you say.

  10. Submitted by John E Iacono on 02/20/2010 - 04:18 pm.

    More seriously, you would be amazed at what a 1/4% increase in the FICA (Social Security) tax would bring in, especially if the limit were raised to $250,000.00 of earned income and indexed for inflation. The current tax is 6.2% for both employers and employees. I have not done the numbers exactly, but it would increase the total FICA collections by over 5% EACH YEAR, with minimal impact on each taxpayer. I believe this would solve the Social Security problem for good.

    As for Medicare, the I believe solution can come better from reigning in the health care industry (but not by any bill now before Congress) than from any adjustments in payments alone.

    There are many ways to do this without cutting payments, such as heavy taxes on profits in excess of, say 6% — more in line with other areas of business: If they can’t keep it, the incentive to get it is reduced, as it won’t help them one bit. If we’re lucky, they will put the funds into cost-reduction efforts instead so they can deduct them.

    Changing focus from multiplying billable details to rewarding outcomes will also help, but care is needed: government is much better at sticks than at carrots. Defining those outcomes is difficult, howver, and would probably have to be done incrementally, starting with the easiest, like returning to a normal life after a heart attack, or regaining speech after a stroke.

    Once these entitlements are out of the way the rest of the problem can be resolved by fiscal discipline.

  11. Submitted by Ron Gotzman on 02/21/2010 - 06:33 pm.

    “Long-time deficit- and debt-hawks like me… ”

    Let’s see Eric, you vote for B.H.O., Big Al and Amy K and call yourself a “deficit hawk?”

  12. Submitted by Bernice Vetsch on 02/22/2010 - 04:34 pm.

    John I: What possible GOOD reason is there to tax some forms of income at higher or lower rates than others?

    Income is income. And our present system punishes those who have no disposal income to use for investment.

  13. Submitted by Sara Barrow on 02/23/2010 - 11:05 am.

    I am posting a link to the NPR story a few days ago on this topic.

    http://www.npr.org/templates/story/story.php?storyId=123848421

    If you have a minute to listen to the story, Simpson’s comments are priceless.

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