Can the White House Deficit Reduction Commission Succeed?
There is a lot of cynicism surrounding the ability of President Obama’s National Commission on Fiscal Responsibility and Reform to fulfill its mandate and come up with a viable plan to reduce our crushing deficits.
One can hardly blame the cynics. Obama’s ploy of creating the Commission in the first place was due to the inability of Washington politicians to face the consequences of their own callous mismanagement and undisciplined actions with taxpayers’ money. Why should this statutorily toothless Commission succeed when Republicans and Democrats continue to act like spoiled brats, refusing to make the hard choices that would untie this Gordian knot of unsustainable deficits?
The short and simple answer: it absolutely must. And in Washington, where necessity is not only the mother of invention, but also the father of political expediency, the Commission may very well supply the fig leaf of political protection needed to begin addressing this monstrous problem.
Created by an executive order on February 18, the Commission was charged with:
identifying policies to improve the fiscal situation in the medium term and to achieve fiscal sustainability over the long run. Specifically, the Commission shall propose recommendations designed to balance the budget, excluding interest payments on the debt, by 2015. This result is projected to stabilize the debt-to-GDP ratio at an acceptable level once the economy recovers. The magnitude and timing of the policy measures necessary to achieve this goal are subject to considerable uncertainty and will depend on the evolution of the economy. In addition, the Commission shall propose recommendations that meaningfully improve the long-run fiscal outlook, including changes to address the growth of entitlement spending and the gap between the projected revenues and expenditures of the Federal Government.
There are two things to note. First, the idea that the budget will be “balanced” by 2015 is an interesting use of semantics. The phrase “excluding interest payments on the debt” is not a throwaway or an afterthought. Taxpayers ponied up $202 billion in interest payments for fiscal year 2009 — a number that will explode to $700 billion by fiscal year 2019 unless we can bring the debt under control.
And that number may be a memory if interest rates rise to any degree. So it isn’t a question of if we can tame the deficit, but how to do it without sending the economy into another tailspin.
Secondly, the Commission is charged “to stabilize the debt-to-GDP ratio at an acceptable level.” That level has been determined to be 3%, which is still unacceptably high at nearly $400 billion.
Only in cuckoo land can $400 billion deficits be considered “acceptable.”
But every journey begins with a first step and the Commission, at the moment, is the only deficit reduction game in town. Congress refused to create their own commission whose recommendations would have been binding. So here they are stuck with President Obama’s creation, reduced to supplying input via the choices both parties make to fill out the membership of the Commission.
That membership is shaping up to be an interesting mix. The president named former Clinton Chief of Staff Erskine Bowles and former Wyoming Senator Alan Simpson as co-chairs, making a statement immediately about bipartisanship. Both men have a reputation for working with the opposition to get things done. This worked to Simpson’s detriment when he was ousted from his position as majority whip by Trent Lott in 1995 following the GOP takeover of the Senate.
What distinguishes Bowles and Simpson is their encyclopedic knowledge of the budget process and experience in negotiating complex agreements. The temperament of both men seems well-suited to what awaits them, as they will almost certainly meet resistance to deep budget cuts and tax hikes from both sides.
In addition to the co-chairs, President Obama has also named:
* Alice Rivlin — former OMB director under Clinton and a Brookings fellow. She also took a turn as a Federal Reserve vice chair; this gives the Commission someone with invaluable insight into monetary policy.
* David Cote — CEO of Honeywell International. A favorite business executive of the president, Cote endeared himself to Obama by pushing the stimulus bill with the business community. No doubt he is an intelligent fellow, but he has little experience in politics. Cote seems to have been appointed as a reward for political chores well done.
The President, in all cases, is responsible to propose a balances budget to the congress.
The American people are at fault for electing and re-electing Congressmen that earmark and vote for deficit spending.
The grandchildren, especially the aborted ones, are responsible for the waste and abuse of the current generation!
Talk about a “me now” society!
Mr. Moran I suggest you study a little history. When has a commissions report no matter how good it was been adopted? This is Obama and Congress abducating their resposibility for the Federal budget.Congress will act when the debt crisis is directly upon us.
For your edification I urge you to read the Grace Commissions report 30 years ago.
“Can the White House Deficit Reduction Commission Succeed?”
No.
Next question?
What a silly article.
Actually taking Obama at his “word” [sic].
No, Mr. Moran, the Commission is created as another layer, another smokescreen, another distraction from actually doing something…except “making excuses for” (see Old English: “justifying”) doing whatever Obama’s true intent may be.
Ruben Navarrette now has some serious competition for worst PJM writer!
You are either kidding or on dope Mr. Moran.
Barrack Hussein Obama is in so far over his head that an offshore oil drilling rig couldn’t go deep enough to tickle his big ears.
The man is clueless, but worse yet he gave free reign of his authority and power to Nancy Pelosi and Harry Reid; producing a triad of government propelled by brute force statism the magnitude of which has never been seen anywhere in the world before now.
Our nation faces a crisis alright. It’s just too bad that the fools that elected this man are just now beginning to see things for what they are: a critical situation that has our country held hostage in an explosive state of economic fear and political uncertainty; hoping and praying to God that we can get rid of this insanity before it destroys whatever is left.
It would be nice if you stop coping out by riding the “we train” of thought blaming both sides of the aisle when the truth is that were it not for the Republicans in Congress there is more than a strong chance you would now be staring at the world through steel bars.
At the very least government controlled speech, healthcare, cap and trade, amnesty for illegal Hispanics and 65-70% tax of individual’s gross income would already be law.
Seriously, Obama is attempting more smoke and mirrors. He is spending beyond sanity and now wishes to have a commission to control it? Lets open the flood gates and then call for controlling a few gallons.
How much is this commission going to add to the deficit???…With the likes of Andy Stern in it, do you think he is going to work for free???..It is like creating a commission to deal with organized crime,and having it be chaired by people in the Mafia…Two things..Obama must really know what he is doing ,or he is really,really stupid….
Of course! It will succeed in demonstrating what a lying ,dissembling hypocrite Obama is.
This is ridiculous. We have a “deficit reduction commission.” It’s called the United States Congress, and it’s about frakking time it started doing its job.
For your edification I urge you to read the Grace Commissions report 30 years ago. okay
The Commission will fail. For the handlers are Government selected, run and ‘think’ exactly like their ‘Big Government is there to help, not hinder’ usurpers, statists.
Be prepared for Obama announcing, ‘This isn’t the White House Deficit Reduction Commission that I knew..’ in 3.. 2.. 1.
It’s amusing to observe the ridiculous “analysis” and theatre associated with what is incorrectly called a budget “crises”. The term crisis implies that which is unforseen and occurs without warning, neither of which can be legitimately claimed about the deficit spending addiction in Washington. It’s as if we are to believe that declining revenues and perpertual year-over-year budget increases only recently have been found to produce deficits. Fascinating! Hardly.
I my home state, our governor has addressed declining tax revenues and previously absurd levels of legislative spending increases by mandating across the board reductions in ALL budgets (no sacred cows). This common sense approach has successfully kept deficits under control for the last 2 years. Coincidentally, this is what most sound businesses and households are doing right now in order to cope with declining incomes and high unemployment (to the chagrin of most economists).
The budget “crisis” was never a crisis and the cure, though not painless (are they ever?) is not so complex that we need a “commission” to figure out what any family who has balanced their budget already knows. What we need is some real leadership – starting with our President.
Ed Wallis has it right,Mr. Moran is in the same league with Ruben
Narravette and Ryan Mauro, Minor Leagues.
I agree it will be a tough job. Dems will work to protect their social spending constituencies. Repubs will work to protect their corporate constituencies. It’s real amazing how much pork is in the total budget, whether social programs or defense spending. Check out the group Citizens Against Government Waste.
Re the Grace Commission reports, yes, they had good things. But that was 30 years ago and this is now. In my state, a Dem governor has made some tough budget choices and reduced spending. Of course, Colorado is constitutionally mandated to have a balanced budget.
We can only hope this commission will accomplish something. And I don’t object to paying a bit more in taxes if spending gets cut way, way back, across the board.
Surely you must know what a farce this whole thing is. No commission has ever had a measurable impact on matters such as these. The sad thing is that you have already presupposed that somehow tax increases are necessary. Have you been living on another planet for the last 50 years. Every increase in taxes is simply accompanied by more spending and this will be absolutely true in this case as well. The federal beast MUST be starved of additional revenue and taxes cut, not raised. What you propose, more taxes, is simply a greater and greater intrusion on the people’s liberty, something ALL statists love. You are clearly in agreement with the statists on this matter. What are doing even contributing on this website?
Go here to see how it could be accomplished:
http://www.hillsdale.edu/news/imprimis/archive/issue.asp?year=2004&month=04
Anybody that buys into this BS is room temperature. First off, you can’t spend your way out of a recession/depression. We are probably in a depression, no one will admit it until it is obvious beyond all belief.
Just how much blood can they squeeze out of a turnip?
The IRS will be the new gestapo and I can assure you that they will probably make the gestapo look like nice guys.
Keynesian economics did not work in the 30′s and we at least had a person actually interested in America, now we have a chicago thug and he loves the muslims and hates everything white, Christian or Jewish. He also fails to realize that black did not make this country.
Dr Walter Williams wrote a piece back in the 90′s and he pointed out that their is no functioning govt at any level anywhere in the world that is black run. We can now add the US to that list.
Ah! We find the estimable Moran here, who won’t allow comments on his own blog on the matter at hand. If the President wants to stall an issue, and employ some of his buddies, what better tactic than a paid commission with offices and staff, plus a mandate to rifle the files of financial institutions. It could be dragged out to eternity with proper handling. The end item, a report, is easily sidestepped once issued, and it will take its place with tons of other studies, reports and recommendations from so-called experts and manipulators in the archives, never to be read again.