The sweeping proposal unveiled by the co-chairs of President Obama’s debt commission has left Washington insiders scratching their heads. If Erskine Bowles and former-Senator Alan Simpson were seeking a compromise that would win commission approval and have a chance in Congress next month, why didn’t they craft a modest package with pre-arranged buy-in? Why offer a dramatic plan that caught all sides by surprise and prompted still-Speaker Nancy Pelosi to denounce it as “simply unacceptable.”
Bowles and Simpson are wily political veterans. So what’s really going on?
What’s going on is that the co-chairs have essentially given up on the commission and their proposal is for a different – and more politically astute – purpose.
It was a long-shot from the start that a presidential commission could agree on a significant package behind closed doors and then muster the votes in Congress to pass it. But the election was a dagger in the heart of the commission strategy.
The Democratic and Republican co-chairs know this. So their proposal is not a framework for a commission deliberation endgame. Their purpose instead is to prompt a larger and much longer public discussion about the scale and scope of the federal government. They recognize that until that takes place, and there is a public consensus on basic issues, the American political system is incapable of taking decisive action.
Such a public discussion delights the right and horrifies the left. So it is no surprise that the most virulent denunciations of the proposal are coming from the likes of Pelosi, a liberal Democrat from California, MoveOn.org and the AFL-CIO.
That’s because a real debate on the size of government requires serious proposals that re-examine the role and social purposes of Social Security, Medicaid and Medicare – the drivers behind escalating long-term explosion of spending and debt. And serious proposals must be clear about what they envision for revenues and tax rates for future generations of Americans.
It’s not surprising that the left in America doesn’t want to debate this – in the election many progressives who did so got their political heads handed to them. From welfare to education to promoting “green” cars, they want to talk only about services and clients, not about what their plans mean for the scope and size of government, or the deficits and escalating tax rates that would result. They don’t want to discuss the fact, as the Congressional Budget Office has shown, that income tax rates would have to double for everyone over the next generation if we balanced projected spending by raising income taxes.
The right has already bellied up to the bar. Incoming House Budget chairman Paul Ryan, also a commission member, has already offered a bold “road map” that shows what entitlement restructuring would have to take place to balance the budget over time while keeping taxes at their historical level of just over 18 percent of GDP. It’s tough and controversial, but it’s recognized by serious people on the left and right as an honest proposal.
Now Bowles and Simpson have added another bold and real proposal.
There are many awful things in Bowles-Simpson for conservatives to attack, including hefty tax increases. But there are also significant items that could shift the national debate forward.
Perhaps most importantly, they propose an explicit and permanent limit on the total size of government through caps on spending and revenues (at 21 percent of GDP) – well below the more than 30 percent of GDP that spending could reach within a generation if no action is taken.
They also want to limit the growth of federal health spending to just 1 percentage point above economic growth. That could, and should, prompt a conversation about transforming federal health support from a defined-benefit system – the basis of Medicare – to more of a defined-contribution system, where basic care is assured but the financial risk to future taxpayers is limited.
The Bowles-Simpson and Ryan plans transcend the pygmy proposals we have unfortunately grown used to in Washington. These can be the basis of a true national debate after the commission shuts down shop in December. It would be helpful if Ms. Pelosi were to encourage her designees on the Commission to offer a similarly bold proposal, of course. But a full disclosure of the left’s long-term spending and tax goals does not seem to be on their agenda.
Stuart M. Butler heads the Center for Policy and Innovation at The Heritage Foundation.
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