Deficit Plan Draws Diverse Support
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The Fiscal Times
December 3, 2010

In a vote that seemed implausible 10 months ago when President Obama appointed two deficit hawks to run a bipartisan, 18-member fiscal commission, more than 60 percent of its members voted Friday in favor of a tough $3.9 trillion deficit reduction package that cuts $2 in spending for every $1 it raises in taxes over the next 10 years.

While the 11-to-7 vote means the National Commission on Fiscal Responsibility and Reform did not achieve the 14-vote threshold needed to send a plan to Congress, the ideological and political diversity of the supporters means the commission achieved one of its major goals: making deficit reduction a central theme of next year’s political debate. Backers included such diverse sitting senators as Richard Durbin, a liberal Democrat from Illinois, and tax cutters Tom Coburn and Mike Crapo, Republicans from Oklahoma and Idaho, respectively.

“This commission has succeeded in changing the issue about whether we should even have a fiscal plan for this country to what the plan should be,” said commissioner Andy Stern, the former president of the Service Employees International Union. While he voted no after offering a plan that would invest more in human services and raise more in taxes from corporations, he said his 10 months on the commission convinced him that “this is the issue of our time.”

The prospects for quick Congressional consideration of the entire package, which was co-authored by chairmen Erskine Bowles, former President Bill Clinton’s chief of staff, and Alan Simpson, the former Republican Senator from Wyoming, are nearly nonexistent. Every sitting member of the House of Representatives from both political parties that will be returning to Congress next year voted against the plan, as did Sen. Max Baucus, D-Mont., who retains his chairmanship of the powerful Senate Finance Committee.

But Durbin, a high-ranking Democratic leader who said he had been inundated with phone calls from liberal supporters after announcing his support late Thursday, called the Bowles-Simpson plan a starting point for the “adult debate” that he hopes will take place next year. “I want progressive voices at the table to argue that we must demand fairness,” he said. “Today, with my vote, I’m claiming a seat at that table.”

None of the conservative Republican House members who voted against the plan showed up for the final meeting of the commission on Capitol Hill. Rep. Dave Camp, R-Mich., who next year assumes the chairmanship of the House Ways and Means Committee, where tax bills originate, issued a statement opposing the plan because it “imposes higher taxes to cover higher spending.”

Alternatives to the Final Plan
Three commission members offered alternative plans during the course of the debate. They included Alice Rivlin, a former Democratic head of the Office of Management and Budget now at the Brookings Institution; left-leaning Rep. Jan Schakowsky, D-Ill., who has strong ties to organized labor and progressive political groups; and Rep. Paul Ryan, R-Wis., a conservative star for Tea Party activists who becomes chair of the House Budget Committee next year.

Rivlin, who voted in favor of the Bowles-Simpson package, co-authored a plan with former Republican Senator Pete Domenici of New Mexico that would shift the mix of tax increases and spending cuts toward 50-50, and step up stimulus spending in the short run to keep the economic recovery on track. “I do think [Rivlin-Domenici] is a better plan, but even that was a compromise,” she said.

Schakowsky’s plan would raise taxes on the well-to-do while sharply cutting the defense budget. Though the most outspoken liberal on the commission, she won praise from the commission chairmen for taking the deficit seriously and offering “a constructive alternative.” She said, “I think we can do it [lower the deficit] without further eroding the middle class in America.”

Her proposal to make further cuts in military spending was endorsed by Rep. Xavier Becerra, D-Calif. “The bulk of the cuts will come on the backs of those who require education, environmental cleanup, housing, senior citizens, health care,” he said in announcing his opposition to the co-chairmen’s plan. That plan “isn’t paid for by those who did the partying during the last decade.”

Ryan, who opposes any tax increases and supports a more radical downsizing of government, offered a plan that would turn Medicare into a voucher program and cap government contributions. And many of the elected Democrats on the commission who voted yes spent most of their final comments attacking those parts of the commission proposal that mimic Ryan’s plan.

Durbin, for instance, blasted the commission’s call to experiment with federal employees’ health insurance by instituting a voucher program. Earlier this week, President Obama asked federal workers to take a two-year wage freeze. The Bowles-Simpson plan called for a three-year freeze on federal workers’ wages.

“To treat the FEHBP [Federal Employees Health Benefits Program] as a guinea pig for a voucher program isn’t fair,” Durbin said. “If we’re going to do that, let’s have a public option [a government-run insurer that competes with private insurers] for public employees. That would have been a noble experiment.”

David Cote, chief executive officer of Honeywell International and one of two business representatives on the panel who supported the Bowles-Simpson plan, expressed bewilderment with the ways of Washington after serving 10 months on the commission. “When the word draconian is applied to something like turning a 5 percent increase over 10 years into a 4 percent increase over 10 years,” he said, “I don’t understand how you get your jobs done at all when there’s that kind of hyperbole.”

Crapo, a member of the Budget and Finance Committees, predicted major pieces of the Bowles-Simpson plan would wind up in Republican budget proposals in the coming year. “We should not let this proposal fall idly by the wayside,” he said. Pointing to the 60 percent vote on the commission in favor of the plan, he said, “We have shown we can get the supermajority necessary to pass this kind of legislation.”

Others who voted with the co-chairmen included Senate Budget Committee Chairman Kent Conrad, D-N.D.; Sen. Judd Gregg, R-N.H.; Ann Fudge, former chief executive of Young & Rubicam Brands; and House Budget Committee Chairman John M. Spratt Jr., D-S.C.

spent 25 years as a foreign correspondent, economics writer and investigative business reporter for the Chicago Tribune and other publications. He is the author of the 2004 book, The $800 Million Pill: The Truth Behind the Cost of New Drugs.