Deficit panel’s plan gets some bipartisan backing
President Obama’s deficit reduction commission fell a few votes shy of the number needed to send its proposal to Capitol Hill for action, but still received enough bipartisan support to raise hopes that political leaders are girding to tackle the nation’s gargantuan debt.
The commission’s final report, with the cinematic title, “The Moment of Truth,” won the backing of 11 out of 18 members — three short of the supermajority required under the executive order that Obama signed in February when he created the panel.
Far from disappointed, commission members and staff were delighted that in the most polarized political climate in memory, a serious effort to grapple with rising deficits won the backing of House members and senators, of conservative Republicans and liberal Democrats, of business leaders and budget experts.
“We took a big banana, and threw it into the gorilla cage, and the gorilla has picked it up,” said former Sen. Alan Simpson (R-Wyo.), who co-chaired the panel with Democrat Erskine Bowles, former chief of staff to President Clinton. “They’ll peel it, mash it, play with it, but they will eat some.”
Blue-ribbon commissions in Washington routinely churn out reports that are ultimately ignored. But there are occasions where the urgency of the moment piques the public’s imagination, triggering a national conversation. The report issued by the Sept. 11 commission, for example, took on a pop culture status and is still sold on Amazon.com.
It’s doubtful “The Moment of Truth,” with its bar charts and tables, will ever become a best-seller. What it might do, though, is become the basis for legislation that reverses a pattern of rising debt.
To arrest the deficit, the report advised capping discretionary spending through 2020, nearly freezing the Pentagon’s budget, and increasing the age for full Social Security benefits. On the revenue side, it advised increasing the federal tax on gasoline by 15 cents, and eliminating the child tax credit, the mortgage interest deduction and the deduction claimed by employers who provide health insurance, among other tax breaks, while reducing income tax rates overall.
Taken together, these steps would cut the deficit by $828 billion over the next five years, en route to a $4-trillion deficit reduction by 2020, according to the report.
Five of six senators on the panel — two Democratic allies of Obama and three conservative Republicans — voted for the plan, but it was endorsed by only one of the commission’s half dozen House members, Democrat John Spratt Jr. of South Carolina, who lost his reelection fight last month. Three Republicans who will hold key leadership posts in the new GOP House majority voted against it.
Obama will submit his 2012 budget in February and could include parts of the blueprint laid out in the commission report. In a signal that the White House is taking the commission’s work seriously, Treasury Secretary Timothy Geithner and budget director Jacob Lew have asked for a meeting with Simpson and Bowles.
Obama’s involvement is crucial, commission members said. One member, Sen. Kent Conrad (D-N.D.) said the next step should be a national summit meeting with Obama and legislative leaders.
Another member, former Congressional Budget Office Director Alice Rivlin, said the president “let the commission do its thing … but he’s got to be a leader. I’d like to see him put it front and center in the State of the Union and in his budget.”
Deficit reduction is dry stuff. But with annual red ink eclipsing the $1-trillion threshold, voter interest in the bleak accounting picture is growing. Republican candidates gained traction in the midterm election by warning of heavy spending.
A new AP- CNBC poll showed that 56% believe budget shortfalls will touch off an economic cataclysm in the next decade.
Mindful of the public’s mood, Obama is taking high-profile steps to demonstrate he is not a classic, free-spending liberal. Early this week, he proposed a two-year pay freeze for federal workers.
Obama landed in Afghanistan on Friday for a surprise visit and has yet to make a public comment on the commission’s work.
In some ways, endorsing the final report was easy; the document is nonbinding. Lawmakers who are routinely at odds on the Senate floor found themselves in rare accord when the stakes were mostly symbolic. Sen. Richard J. Durbin (D-Ill.) the Senate’s second-ranking Democrat, and Sen. Tom Coburn (R-Okla.), a staunch fiscal conservative, both endorsed the package.
“There’s no question that Americans want to reduce the deficit and spending. The question is how, and on what.” said Mark Mellman, a Democratic pollster. “We saw in this commission that despite the best intentions and the best minds, you couldn’t get a strong majority of them to agree. It’s hard to imagine how to get the public and politicians to agree.”
In the days leading up to the meeting, Bowles and Simpson, along with commission staff, spent hours talking to panel members in an attempt to round up the 14-vote supermajority. Had they reached that threshold, Senate Democratic leader Harry Reid of Nevada had pledged to bring up the recommendations on the Senate floor.
The crisis laid out by the commission is stark. This year, federal spending accounts for nearly a quarter of the gross domestic product — the value of all the U.S. economy’s goods and services. Not since World War II has spending eclipsed this level, the report said. Tax revenues, by contrast, account for just 15% of GDP.
“I truly believe, other than the terrorist threat to America, I believe this debt threat constitutes the greatest challenge to our country going forward of any,” Conrad said.