The present era of polarization may have reached its nadir on January 25, 2010. That was the day Senate GOP leader Mitch McConnell led a filibuster to kill a deficit reduction commission — something he’d loudly demanded earlier. All it took was President Obama’s endorsement to turn McConnell and the six Senate Republicans who co-sponsored it against the bill.
Senate Republicans, have you no shame? Well, keep in mind that this is the same gang that’s now posturing as the saviors of Medicare, which Obama proposes to cut to help pay for health care reform.
Undeterred by the flight of the GOP’s fiscal chicken hawks, President Obama today unveiled an 18-member special commission to tackle the nation’s budget crisis. Named to lead the panel were Democrat Erskine Bowles, chief of staff to President Clinton, and former Senate Republican leader Alan Simpson.
It’s easy to be cynical about such “blue ribbon” commissions. They are supposed to signal that political leaders are serious about solving intractable problems, but often convey the opposite — a craven desire to punt tough decisions to retired dignitaries who don’t have to face the voters.
And setting up a commission by executive order is distinctly inferior to enacting one into law, since the president can’t compel Congress to give his panel’s recommendations an up-or-down vote. Speaker Nancy Pelosi has offered distinctly unenthusiastic assurances that the House will consider the commission’s suggestions.
Still, such commissions are sometimes the only way to break a political impasse — recall the 1983 Greenspan Commission for Social Security reform, or the congressionally mandated military base-closing commission. Such action-forcing mechanisms give politicians just enough bipartisan cover to embolden them to vote for reforms everyone knows are necessary if unpopular.
In a bow to political reality, the president’s commission will report its recommendations after the midterm election, before the end of the year. Presumably, that will tee up the debate for the next Congress, while giving the economy this year to gain strength and whittle down the unemployment rate.
That’s the right timing, and it belies claims by Obama’s liberal critics that highlighting the urgent need to put America on a more sustainable fiscal course is antithetical to economic recovery. After all, only about $300 billion of Obama’s $800-plus stimulus package has been spent, and Congress is crafting a jobs bill intended to give a smaller but more targeted boost to employment.
But here’s what really irks Obama’s critics on the left: they see the commission setting the stage for an assault on entitlement programs. They are not entirely wrong: it’s the unsustainable growth of Medicare, Medicaid, and Social Security that’s driving America’s long-term fiscal woes. But progressives ought to have more confidence in Obama’s ability to take a balanced approach to reforming the Big Three. It’s better, and safer, to do that now rather than risk handing off the job to some future Republican president who may be hostile to the idea of social insurance.
The president’s commission must do what lawmakers in Washington won’t — craft a balanced program of benefit cuts and tax increases to slow the growth rate of health and retirement benefits and move them toward solvency. Otherwise, those programs will consume the equivalent of every penny Washington now raises in taxes, necessitating unprecedented tax hikes, or borrowing at levels that will jeopardize America’s growth and fiscal stability.
But the commission shouldn’t just look at the Big Three, it should also look at the federal government’s massive spending on tax entitlements. Washington spends over $1 trillion a year on tax breaks and subsidies, including such popular items as the mortgage interest deduction and exclusion of employer-paid health benefits, crop subsidies, and a raft of special bennies for politically influential industries, aka, corporate welfare. There are also lots of important breaks for low-income Americans, like my own favorite, the earned income tax credit. All of these tax expenditures have rationales and constituencies, none should be regarded as sacrosanct.
This will raise hackles among Republicans, just as talk of benefit cuts (which should be focused on upper income beneficiaries) makes Democrats nervous. Both the left and the right will have to give ground to cut a responsible, and politically sustainable, deal that can restore out nation’s fiscal health.