Opinion: A deficit-reduction plan that may not succeed, but is sure to offend
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Is it too early to declare the plan released Wednesday by the chairmen of the White House’s deficit-reduction panel dead on arrival? It has something for everyone -- something to hate, that is. Highlights include almost $1 trillion in higher taxes over the next decade (including a higher gas tax), and twice that amount in spending cuts; deep reductions in Medicare payments to doctors, less generous Medigap coverage and new limits on medical malpractice awards; reduced subsidies for farmers, college students, rural phone lines and electricity; a higher retirement age and less generous Social Security benefits for roughly half of all retirees; and billions of dollars carved from military and federal employee pensions.
But regardless of what you think about the details, you have to admire the ambition of the panel’s co-chairmen, Erskine Bowles (erstwhile chief of staff for President Clinton) and Alan Simpson (former GOP senator from Wyoming). Asked to perform a big job, they’ve put a very big proposal on the table.
And judging more by the outlines than the specifics, there’s lots to like about the plan. It would quickly stop the debt from growing as a percentage of GDP, and eventually bring spending and revenue into balance (albeit at a higher level than has been customary). The tax provisions would radically simplify the tax code, collecting more dollars by lowering rates but eliminating most deductions and credits. Addressing the weakest aspect of this year’s healthcare reform law, it proposes tough limits on the growth of medical costs. It would eliminate Social Security’s long-term solvency problems. And it would require the president and Congress to take a longer-term view of the budget process -- an important change that another bipartisan deficit-reduction group, the Peterson-Pew Commission on Budget Reform, advocated Wednesday.
The White House’s response didn’t quite fit into the ‘damning with faint praise’ category, but it was close. Here’s the statement from White House spokesperson Bill Burton:
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. These ideas, however, are only a step in the process toward coming up with a set of recommendations, and the president looks forward to reviewing their final product early next month.
Here’s what I wish Burton had said. It’s the comment offered by Jon Cowan, president of the centrist think tank Third Way:
With huge deficits projected for decades to come, it’s now time to put up or shut up; in short, to lead or leave. This is the first real leadership test for both parties in a divided capital: Will they embrace the fiscal commission recommendations, or cop out and pick the plan apart? No plan will be perfect, but without a serious, long-term commitment to balance the budget, we’re going to stifle economic growth for decades and ultimately have to make draconian cuts in spending. Only by acting aggressively now do we avoid a budget doomsday. President Obama, Democrats and the new House Republican majority all campaigned on a pledge to get the deficit under control and reform entitlements. The moment of truth is here. The commission report is the only game in town -– and if this wasn’t just a campaign slogan, the parties must come together and demand a vote on the commission’s recommendations.
I’d be shocked and amazed if Bowles and Simpson persuaded a majority of the commission’s members to sign on to their draft. And some of its pieces may be completely wrongheaded. My initial reaction is that the plan doesn’t do enough to boost economic growth, which is a vital part of the solution. There also are easier ways to fix Social Security’s long-term problems than they’ve proposed. Nevertheless, I think they’ve done precisely what they were supposed to do. Even if it doesn’t win over the chairmen’s colleagues on the commission, their proposal is serious enough to push lawmakers past empty cliches (e.g., eliminating the deficit by cutting ‘waste, fraud and abuse’ or by eliminating earmarks) toward a debate over what it’s really going to take to regain control over the federal budget.
-- Jon Healey