Orszag Hints at Alternate Route to Bi-Partisan Fiscal Plan
Policy + Politics

Orszag Hints at Alternate Route to Bi-Partisan Fiscal Plan

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Even if President Obama’s bipartisan fiscal commission becomes split along party lines, a top White House official suggested an alternative strategy this week by which the panel could still come up with recommendations for cutting the deficit that have at least an aura of bipartisanship.

At a dinner on Capitol Hill on Wednesday, White House Budget Director Peter Orszag predicted that the bipartisan panel would defy political nay-sayers and produce recommendations that “will exert pressure on the political system.”

But for the first time since President Obama created the panel in February, Orszag raised the possibility that its recommendations, due by December 1,  might simply come from the panel’s two co-chairs rather than from recommendations supported by 14 of the panel’s 18 members.

“I’m fairly confident that something – I don’t know if it’s a majority report or a co-chair report – but something is going to come out of this commission, and it will exert pressure on the political system . .  . to move forward,” Orszag told listeners at a dinner honoring Leon Panetta, the C.I.A. director and a former Democratic lawmaker who also served as former budget director under President Clinton.

“People who are selling the commission short – I know there are a lot of people in town who are doing that – are going to wind up regretting having done so,” Orszag said at the dinner sponsored by The Committee for a Responsible Federal Budget, a bipartisan, non-profit group focused on fiscal issues.

The panel’s two co-chairs – former Republican Senator Alan K. Simpson and Erskine W. Bowles, a former top aide to President Clinton – couldn’t be reached Thursday for comment on the idea of coming up with their own report.  “Our plan is to deal with what the executive order calls on us to do, which is to find consensus among at least 14 out of 18 members,’’ Bruce Reed, the commission’s executive director, said Thursday.  “We’re hopeful that the members on both sides can come together.”

But in mentioning the idea of a “chairman’s report’’ so explicitly and forcefully, Orszag seemed to be suggesting that White House officials see it as a next-best strategy of putting down a marker and framing a “bipartisan’’ approach for fiscal battle in Congress next year.

Some budget experts said the idea would help get around the impasse that is likely to block the panel from formally agreeing on recommendations. Under the panel’s rules, any proposal will need at least 14 votes. But 12 of the panels’ members are either current Republican or Democratic lawmakers, and those members are likely to end up in a stand-off. Democrats generally insist that any budget plan must include both tax increases and spending cuts, but the panel’s six Republican lawmakers are expected to oppose any recommendation for tax increases.

“You’re probably not going to get 14 out of 18 votes, but that doesn’t mean you have to say the commission is a failure,’’ said Robert Bixby, director of the Concord Coalition, a bipartisan research group that advocates fiscal discipline.  “You can define your own standards of success.”

(The Concord Coalition obtains some of its funding from the Peter G. Peterson Foundation. Peter Peterson finances The Fiscal Times, an editorially independent digital news organization that specializes in fiscal and economic matters.)

Some members of the president’s fiscal panel said it was too soon to speculate about the deliberations. “We just got started . . . and I’m hopeful something good will come of it,” said Alice Rivlin, a panel member and a former director of the Congressional Budget Office. “There’s no point in speculating on what might come out of it.”

Deep partisan fissures over spending and taxes surfaced immediately during the panel’s organizational meeting April 27. Rep. Paul Ryan, R-Wis., a senior House Republican on budget issues, suggested that the commission revisit the newly enacted health care law in search of spending cuts – almost certainly a non-starter for Democrats. And Ryan and other Republicans made it clear they were as opposed as ever to tax increases – an ingredient that many Democrats believe is essential to an overall deficit reduction package.

Indeed, the panel’s co-chairmen, Democrat Erskine Bowles, a former White House chief of staff, and former Republican Sen. Alan K. Simpson of Wyoming, have acknowledged that it will be highly difficult for the commission members to overcome election-year “cynicism” and a “toxic” atmosphere pervading Washington. The folksy Simpson has repeatedly referred to the assignment as a “suicide mission.”

The White House and Congressional Budget Office both predict that deficits will remain unsustainably high for the rest of the decade unless Congress makes significant budget changes. President Obama’s budget plan for fiscal 2011, which includes changes to reduce future deficits, still projects a deficit in 2017 of $778 billion. The government’s publicly-held debt would total $15.7 trillion – 74 percent of the nation’s gross domestic product.

Obama has asked the new commission to agree on a package of proposals by Dec. 1 that would balance revenues and spending for everything except interest on the debt by 2015. The recommendations would come barely a month after the November mid-term elections, and it would be left to congressional leaders to decide whether to consider them before adjournment – or to use them as guideposts in the new Congress.

There is at least one precedent for a blue-ribbon panel whose co-chairmen issued recommendations even when the other members cannot agree.  In 1994, the Bipartisan Commission on Entitlement and Tax Reform, chaired by Senator Robert Kerrey, a Nebraska Democrat, and Senator John C. Danforth, a Missouri Republican, ended up bitterly divided.

But Kerrey and Danforth nevertheless developed their own Social Security proposal that broke with both Republican and Democratic dogma.  Their proposal called for raising the retirement age to 70, cutting the Social Security payroll tax and redirecting that money into mandatory private accounts, among other changes.

Those ideas were not adopted.

As a practical matter, recommendations from Simpson and Bowles might have almost as much impact as a report by the whole deficit commission.  Whether or not the proposals receive 14 of 18 votes, Congress is not obligated to vote on them. Both a “chairmen’s report” and “commission report’’ would at most influence the debate.