Six Fiscal Heroes Plow the Road for Deficit Cuts

Six Fiscal Heroes Plow the Road for Deficit Cuts

iStockphoto/The Fiscal Times

At the Imagine Solutions conference in Naples, Florida last week, CNBC’s Tyler Mathisen asked a panel of Fiscal Times columnists whether any elected official in the federal budget debate could be considered a hero. There was a long silence.

If only he’d asked about villains. Or obstructionists. Or innumerates. They seem to be everywhere, not least because members of Congress spend so much time picking them out in the ranks of the opposition. If you believe that the only sensible way forward is compromise, as most Americans do, it’s hard to be anything but disheartened by displays like Senate majority leader Harry Reid’s “Tell Republicans to back off Social Security” rally on Monday, or by the Tea Party’s scheduled rally tomorrow to urge Republicans not to compromise. When Reid claims that Social Security is “just fine” financially or when Tea Party caucus leader Michelle Bachmann says that there is $105 billion “hidden” in the health care bill, you despair of the future.

But such unconstructive behavior, thank goodness, is not the whole story. The TFT panel did, in fact, come up with a response for Mathisen, just as Congress may have come up with a response to Congressional fiscal intransigence. That answer is a group of Senators known as the Gang of Six. Let us now praise moderate men.

All of them have made statements
that could get them burned as
heretics by their respective party’s core.

The gang, evenly split between Democrats and Republicans, has taken the lead on drafting a long-term solution to the nation’s fiscal crisis. The six began meeting after the President’s National Commission on Fiscal Responsibility and Reform issued its report late last year; they began to take their message on the road earlier this month at a Chamber of Commerce meeting in Richmond, Virginia. All are respected on the hill. All have impeccable credentials as party loyalists. And all of them have made statements that could get them burned as heretics by their respective party’s core.

The three Democrats are:

Kent Conrad of North Dakota, chairman of the Senate Budget Committee and one of the most economically astute members of the chamber.

• Richard Durbin of Illinois, the second most powerful Democrat in the Senate and President Obama’s closest ally in Congress. 

• Mark Warner of Virginia, a first-term Senator and self-described “radical centrist,” who balanced Virginia’s state budget as governor.

The Republicans are:

• Mike Crapo of Idaho, a social conservative, member of the powerful budget and Finance committees, and an advisor to Senate minority leader Mitch McConnell.

• Tom Coburn of Oklahoma, a former doctor and businessman and another social conservative. He’s one of the few Republicans who describes himself as “a close friend” of President Obama.

• Saxby Chambliss of Georgia, a budget hawk and, with Coburn, a personal friend of House Speaker John Boehner.

Their legislative work is still unformed, but they have said they’re taking the plan proposed by the president’s commission as a template. Four of the six (all but Chambliss and Warner) were among the 11 members of the commission who supported its recommendations. Considering that the commission couldn’t win more than a slight majority even of its own 18 members, the commission plan may not seem like the most promising place to start. But budget experts outside Congress think that the Gang is shooting relatively straight.

The Gang is clearly prepared to lead both
parties’ sacred cows to the slaughter, from
defense spending to entitlements to revenue increases.

For one thing, the Simpson Bowles plan makes almost everyone unhappy, which is essential for any broad-based budget balancing legislation. “Everyone has to feel screwed,” says Ron Haskins of the Brookings Institution, “The AARP has to say, ‘We hate this provision over here, but the farmers are suffering over there.’”  The Gang is clearly prepared to lead both parties’ sacred cows to the slaughter, from defense spending to entitlements to revenue increases. “At some point you're going to have to link arms with someone and take a jump,” says Warner. “This will not happen unless there's a grand enough bargain that everybody feels they've got some skin in the game.”

In addition, the Gang is willing to consider raising revenues, as well as cutting expenditures. That requires particular courage for the Republican members. But without more revenues, the numbers simply don’t add up, as Alan Viand, an economist at the conservative-leaning American Enterprise Institute admits. “The final package must be a mixture of revenue increases and entitlement restraint,” he says. “I can’t see it working any other way.” 

For the Republicans in the Gang, lowering tax rates as part of a comprehensive tax reform — a move included in both the president’s deficit commission plan and the rival Rivlin/Domenici plan — would provide the political coverage for revenue increases. “I've never voted for a tax increase and certainly hope I never have to vote for one,” explains Chambliss. “What I want to do, though, is create a system that is much simpler and is much fairer, and at the end of the day will allow revenues to be generated” to contribute to a balanced debt reduction plan.

In the six weeks or so that the Gang have been making their case publicly, they have enjoyed generally favorable press and the endorsement of 64 colleagues in a letter to the White House. But a letter of encouragement comes cheaper than a vote on a painful bill. And just in case you thought this was going to be easy, neither party’s legislative leader chose to sign the letter. So far, at least, the hall of fiscal heroes is in no danger of overcrowding.

Related Links:
Gang of Six Press Obama to Take Deficit Action (The Fiscal Times) 
As Deficit Looms, Gang of Six Seek Compromise (NPR) 
Senators Pitch Debt Reduction to Business Elite (Bloomberg Businessweek)