Ganging up on the debt
The din of partisan bickering in Washington subsided briefly this week when six Republican and Democratic senators unveiled a long-awaited proposal to rein in the runaway federal deficit. The so-called Gang of Six made the same point that a slew of nonpartisan and bipartisan budget commissions have made over the last year: Washington’s fiscal problems are so big that solving them will be painful for all concerned. The question is whether enough members of Congress can accept that premise and embrace a deal that forces both parties out of their ideological corners.
Although they are still working on some of the details, the six reached agreement on the main elements of their plan, which would reduce projected deficits by about $3.7 trillion over the coming decade. It would use a combination of spending cuts, benefit reductions and revenue increases — achieved through a tax overhaul that lowers rates but eliminates numerous tax breaks — to stop the national debt from growing faster than the economy by 2015.
Not surprisingly, the plan has drawn complaints from the left about cuts to Social Security and Medicare, and from the right about defense cuts and tax increases. But the senators are right about the need to simplify and broaden the tax code and to put entitlements on a sustainable footing without slashing aid to the most vulnerable. It’s worth debating whether their plan spreads the pain fairly, and whether the tax and spending reforms would help the economy grow faster. Those considerations should be paramount in any effort to close the budget gap. But there should be no debate over the need for compromise.
Unfortunately, it’s not clear that many members of the House Republican majority agree or, even if they do, that they’re willing to soften the anti-tax stance that’s been a fixture of their campaigns. Similarly, many Democrats have been loath to trim the growth of Social Security and Medicare benefits, which could hurt their claim to be staunch defenders of those programs.
The immediate problem for Washington is that it’s reached its statutory limit on borrowing, but lawmakers haven’t agreed to raise the limit even though the federal government has committed to spending far more than it collects in taxes. The Treasury Department says it will no longer be able to cover all the government’s bills after Aug. 2, and financial markets are soon expected to start reacting — badly — to the prospect of Washington stiffing some of its creditors.
Although news of the Gang of Six’s proposal raised hopes that it could end the impasse over the debt ceiling, members of the group say it won’t be ready to be considered in time. Nevertheless, their effort shows that liberals and conservatives can bridge their differences to make significant headway against the deficit. If only the debt-ceiling talks were imbued with the same spirit of compromise.
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