The Obama Deficit Commission: Five Issues To Watch

By Howard Gleckman,

President Obama held the first meeting of the Bipartisan Commission on Fiscal Responsibility and Reform Tuesday. Here are five issues to watch as the deliberations get under way.

President Barack Obama met with the National Commission on Fiscal Responsibility and Reform, a bipartisan panel tasked with finding ways to reduce federal deficits, as seen in this photo taken by J. Scott Applewhite/AP on Tuesday, April 27, in the Roosevelt Room at the White House in Washington.




Included in the photo are: the House Budget Committee's ranking Republican Rep. Paul Ryan R-Wis., Senate Budget Committee Chairman Sen. Kent Conrad, D-N.D., Commission Co-Chair Erskine Bowles, and Commission Co-Chair Alan Simpson.

President Obama’s Bipartisan Commission on Fiscal Responsibility and Reform had its first meeting Tuesday. As I peer at my bookshelf full of well-meaning policy prescriptions produced by similar panels over the years, I am skeptical at best. These enterprises are, as Dr. Johnson said of second marriages, “a triumph of hope over experience.” Still, you never know. As my colleague Gene Steuerle reminds me, few thought tax reform would get off the ground in 1984-85. Yet, by mid-1986, it had happened.

As you consider the deliberations of the latest panel—a bipartisan gang of 18 that has until Dec. 1 to send Congress a non-binding deficit reduction proposal—here are five issues to watch. If the panel seems to be reaching consensus on these, maybe it can accomplish something. If not, as Senate Majority Leader Dick Durbin (D-IL) told The Washington Post’s Lori Montgomery, “It would take a miracle.”

1. No New Taxes: Republicans will have to extricate themselves from their pledge to never raise taxes on anyone at any time. It is not possible to resolve the fiscal mess without new revenues. The honest discussion is what mix of revenues and spending cuts is best, and where to collect new taxes. If the Rs are willing to have that conversation, this panel will have achieved a major breakthrough. If not, our time will be better spent watching Dancing with the Stars.

2. No New Taxes on the Middle-Class: Similarly, commission Democrats need to help Obama extract himself from his own pledge, made repeatedly in the campaign and in the nearly 18 months since, that he won’t raise taxes on those making less than $200,000 or couples making less than $250,000. Even if Congress could agree to control future spending, there are not enough rich people to finance a government that spends, say, 20 percent or 21 percent of Gross Domestic Product. As the Tax Policy Center has shown, a deficit reduction plan that exempts those $200,000 earners from tax increases would drive top bracket rates to close to 80 percent. In a recent interview with The New York Times correspondent John Harwood, Obama appeared to be leaving himself some wiggle room. The panel can help bail him out, but eventually he will have to do a lot more than wiggle.

3. Social Security Reform: For Democrats, Social Security is what health reform was for Republicans: They think their best response to any change is “No.” The Social Security shortfall is, as these things go, easy to fix: A small payroll tax increase here, a bit of benefit rejiggering there. Well-designed reforms could even put more money into the pockets of those elderly who need it most. But commission Democrats will have to drop this potent political bludgeon to make a fiscal deal.

4. Medicare Cost-savings: I remain flabbergasted that Obama and congressional Democrats were willing to take steps in the health bill to control future cost growth in Medicare—and were opposed by Republicans. GOP commission members need to get serious and work towards responsible cost-cutting in the government’s biggest cost driver. This can be done without jeopardizing anyone’s health but it requires pols of both parties to tell seniors that more medical care is not necessarily better medical care.

5. The Atmospherics: These matter. Will this commission look like it is driving towards a common goal of deficit reduction, or will it be a platform for pols to pander to their constituencies? It will require somebody to break from type and lead the group to consensus. Watch to see if anyone steps up.

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