It looks like President Obama is going to create the bipartisan commission to cut the deficit that Kent Conrad and Judd Gregg have been pitching. Except that now Judd Gregg is against it.
According to the original Conrad-Gregg plan, the commission would have eighteen members -- eight named by Congressional Democrats, eight by Congressional Republicans, and two by the administration, for a ten-eight split; if fourteen of the eighteen could agree on a deficit-reduction plan, Congress would have to vote it up or down without amendments. The Conrad-Gregg proposal is expected to be voted down in the Senate. So instead, Obama would appoint a commission by executive order, with six people named by Congressional Democrats, six named by Congressional Republicans, and six named by the administration, including at least two Republicans -- for a ten-eight split; if fourteen of the eighteen could agree on a deficit-reduction plan, Congress would vote it up or down without amendments; however, Congress could separately choose to amend it. According to the Washington Post, Gregg "called a presidentially appointed panel 'a fraud' designed to do little more than give Democrats political cover." Huh? I'm guessing Gregg's objection is that Obama's plan is based on an agreement with Congressional leaders, rather than actual legislation -- but if you can't pass the legislation, what else do you want Obama to do?*
More, important, is this a good thing? My prediction is that it will amount to exactly nothing, although there is a possibility it could turn out badly. I simply don't see how any plan can get the agreement of fourteen commission members -- meaning all the Democrats and four of eight Republicans, or all the Republicans and six of ten Democrats, or something in between.
Some people like to point to the Social Security commission of the early 1980s, but Jackie Calmes's article in the New York Times showed that that commission was a failure. We only got Social Security reform because (a) the administration negotiated with commission members after the commission itself broke down (remind me again, why was Alan Greenspan appointed Fed chair in the first place?) and (b) Congressional Democrats added a provision to increase the eligibility age -- which is the rough equivalent of Congressional Republicans adding a tax increase today, meaning it ain't gonna happen now.
Others point to the commission to close military bases. But that was a very different issue, because base closure was a district-by-district, state-by-state issue not a Democrat-Republican issue like taxes and government spending.
So my prediction is that the administration, meaning Orszag's brainiacs, will put forward some sensible solutions that include tax increases and modest entitlement reductions; Congressional Democratic appointees will oppose the entitlement reductions but go along grudgingly because they want to accomplish something while Obama is in office; Congressional Republican appointees will oppose the tax increases and not go along; and we'll end up with gridlock. Even if by some miracle something comes out of the commission, if it contains a single dollar of tax increases (or even something that can be spun as a tax increase, like allowing any of the Bush tax cuts to expire on schedule), it will be rejected by Republicans in Congress, who will probably have more votes next year than they have now. As Ezra Klein said, "You can't govern this country if the party that doesn't control the White House simply refuses to give the party that does control the White House any accomplishments."
But there is a bad scenario, as Mark Thoma warns. The Obama administration could appoint six people who are willing to gut the safety net further in order to balance the budget, and it might be able to pressure Pelosi and Reid to appoint moderates instead of liberals. Then you might be able to come up with fourteen votes for a package that only includes entitlement cuts and no tax increases, which would be acceptable to Congressional Republicans and their veto-wielding minority.
Would the administration actually do this? I like to think they wouldn't, but at times they seem to care about balancing the budget more than how they balance the budget. I think it was pretty clear in the health care process that their one non-negotiable priority was fiscal balance over ten years. In other words, they want to save the country from future deficits so much that they might convince themselves it's better to accept whatever the Republicans give them than not do a deal at all. Which puts us in this curious situation where the party with the White House and the largest Senate majority in decades ends up letting the other party govern the country.
Although I expect the commission to be a dud (or worse), in the short term I think the politics are good for the administration and the Democrats, because they can say they are doing something about the deficit -- and it is actually something favored by deficit "hawks"** like the Peterson Foundation. And maybe that explains why Judd Gregg is suddenly against his own idea.
* And besides, I don't see how Congress could prevent a future version of itself from amending the plan put forward by any commission. It could, conceptually speaking, simply retype the entire plan, add a few changes, and call it a new bill, couldn't it?
** Always put in quotation marks because most "hawks" supported the Bush tax cuts and the unfunded Medicare prescription benefit.
How about we end the wars in Afghanistan and Iraq, which have bankrupted the Treasury, instead! How about we go after all of those tax-avoiding offshore accounts like the ones in the Cayman Islands!
This commission idea stinks. It's just another way to take away more from Main Street so that it can be given to Wall Street instead!
http://costofwar.com/
Gore had the right idea with the 'lock box'.
This debt reduction commission is a bad idea because it is, once again, more legislation making out of sight of the citizens - i.e. voters.
When an important change is proposed, for example, cut Social Security for high earners, many individuals will be affected. People who have paid into Social Security for all their working life, supporting those that die early, those who are disabled, those who retired ahead of them, have expectation of a certain level of return. Already the return is only 70% for the highest earners - the voiced targets of those who want to "means test" Social Security. Why shouldn't such important legislation be considered by itself with full debate so that those affected do have a chance to yell about, and, yes, stop this if they can?
When legislation is developed by a commission the public gets no input or visibility during its development. No amendments means the legislation can then be voted on quickly with little debate. This is an undemocratic choking of public input on matters of extreme importance to the public.
And, this is taking the process that was used to mute input on the current health bills (especially the Senate bill) to an extreme.
Shame on anyone for being attracted to, proposing, or participating in this undemocratic behavior.
Great comment.
Here's a clue - JOBS!!!!
If you want to take care of the deficit, take care of people losing their homes, their healthcare, etc. you need to make sure they have jobs. In these past few years we have outsourced all our high tech jobs to foreign countries. We have NOTHING left. First it was manufacturing moving to Mexico (now China), then we started outsourcing our call centers to India, then our IT help desks and now we our outsourcing our engineering. Even if a company wanted to hire local engineers that would only guarantee them being uncompetitive and going out of business.
So why are our politicians not doing what NEEDS to be done and ensuring that Americans have jobs; I'm guessing cause it will probably impact the profits of their major donors.
We are not going to build an economy mowing each others lawns or cutting each others hair. We need to bring BIG business back to this country and the way to do it is by taxing the blazes out of outsourcers and reviving import tariffs. This is how the America industrial economy developed and its how we'll do it again.
" Hey, I know what'll get us back in the good graces of the American people !" "Let's figure out a way to cut Grandma's social security check in the middle of a raging recession !" Brilliant !!!!!
Yes indeed, a loathsome creature like Pete Peterson who's enriched himself by billions on Wall St. by stealing monies from the middle class is once again on his crusade to cancel the national "safety net".
Of course, we could never tax billionaire's one extra penny {$100 billion annually}, or get out of Irag-Afghanistan {$238 Billion annually}, or cut the bloated Defense budget {$200 Billion annually} so we spend as much as only 3/4 of the freakin' earth on weaponary annually, or clawback Banker theft {$700 Billion} or stop corporate welfare {$200 Billion annually}.
No sir, no way. Grannys' $600 bucks a month is destroying the very fabric of our society !!!!!!
The Dems should go the way of the Whigs if they implement this catastrophe. I've got news for Pete Peterson and his puppet masquerading as president. AARP, every union, every single group you can possibly imagine, by the thousands, are already aligned against this "cat food" commission.
What's next on the Dems plate ? Repealing child labor laws ?
Gad, conservatives! Is it worth trying to make sense of anything they say?
The Administration has repeated shown it is marching to orders; whose orders?; no one dare say.
The Administration must discover instruction from Franklin D. Roosevelt; " the nation asks for action and action now." Economy action programs that create economic recovery are necessary. A job mobilization program is the priority, in creating a sound national economy. The power of the Federal government must be used, putting people to work now, as if it were a war-time effort. Because it is.
GREAT! It could be a dud or it could be a total failure. Who wouldnt want a commission like that? Furthermore, the deficit should not be the focus of attention in a recession. This is an absurd and ridiculous republican idea. And its even more ridiculous that republicans in congress are calling it ridiculous because it is there stupid idea to begin with. No one ever talked about the deficit during the bush administration. The deficit seems to be a codename for republicans to block any and all significant legislation that comes with a price tag. Job creation, healthcare reform, financial regulation should be the priorities. Not ways to cut the deficit. Because in the end, americans dont actually care if the deificit is reduced if they are jobless, homeless, bankrupt and sick without access to insurance. This idea should be put in the garbage where it belongs. The deficit can be handled later when the economy shapes up.