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Why Republicans like Simpson-Bowles

By Ezra Klein,

I get at this a bit in today’s column, but one of the curious things about the GOP’s interest in Simpson-Bowles is that Simpson-Bowles has more in tax revenue and more in defense cuts than anything President Obama has proposed. It also, to be fair, has more in Social Security reforms and more in Medicare cuts than anything the president has proposed. Nevertheless, a traditional accounting suggests that the White House’s deficit-reduction offers have been well to the right of the Simpson-Bowles plan.

You can see this on the above graph, which uses numbers (pdf) from the Committee for a Responsible Federal Budget*. And yet the Simpson-Bowles plan has fans in the Republican Party. Why?

I think the correct answer to this is: Who cares? If a bunch of elected Republicans have decided they like what’s in Simpson-Bowles, and what’s in Simpson-Bowles is substantially better than what’s been in most of their budget proposals, then what possible downside could there be for the White House and the Democrats in pursuing the plan? If Republicans eventually balk at it, as Democrats suspect will happen, then at least it’s clear who was willing to compromise and who wasn’t.

But perhaps the policy wonks are looking at this too much like policy wonks (an affliction I am not immune to). For one thing, compromising with Obama is compromising with a Democratic president who’s at 44 percent in the polls and at 9 percent among Republicans. No Republican politician can survive that. Compromising on Simpson-Bowles is compromising with two men who have become synonymous with bipartisanship and tough choices and hard decisions and all sorts of other platitudes voters love. And it’s not as if members of Congress haven’t seen this graph:

Sen. Michael Bennet

There are plenty of nervous members of Congress from both parties who worry that they can’t survive an election if they can’t point to any real progress on the deficit. And so, the fact that both Democrats such as Sen. Joe Manchin and Republicans such as Sen. Lindsey Graham reflexively brought up Simpson-Bowles when the supercommittee failed is evidence of a political dynamic worth taking seriously, not something to dismiss as a sign of insufficient policy analysis.

And on the policy side of things, note that many Republican policy elites really like Simpson-Bowles. Over the past two weeks, Glenn Hubbard and Doug Holtz-Eakin, two of the most influential economists in the Republican Party, have told me they wished Simpson-Bowles had gotten a closer look.

Perhaps that’s because Simpson-Bowles includes some real prizes for the Republican Party. Raising the Social Security retirement age, for instance, which I think is bad policy, but which also looms far larger in the minds of both parties than its actual budget savings would suggest. Simpson-Bowles also includes more Medicare reforms on the beneficiary side than Obama’s plan does, and a more aggressive argument for rate-lowering tax reform. It also says — although doesn’t really enforce — that tax revenue should be capped at 21 percent of GDP. And, not for nothing, it reduces the deficit by a whole lot more than Obama’s proposal does, too.

So perhaps Democrats are simply wrong about what really moves Republicans.

Either way, there’s no reason Democrats should be rejecting Simpson-Bowles on behalf of the Republicans. And, to be fair, that’s not all that’s going on here: The Obama administration doesn’t like the defense cuts or Social Security reforms in Simpson-Bowles, and they’re skeptical that the tax reform process could really generate as much revenue as the document promises. So their thinking was that they could work off of the Simpson-Bowles proposal and come out with something better.

That’s pretty much what they tried to do in April. But because that plan had Obama’s name on it, it was dismissed as a liberal nonstarter. Their strategy, in other words, was a huge failure, and over the past year, they’ve watched the deficit debate move far, far, far to the right.

Whether an effort to revive Simpson-Bowles would actually mean that the plan passes or would just mean that the debate gets recentered and Republicans have to take the blame for killing the proposal is anyone’s guess. But neither outcome is a bad one for the Democrats. Or for the country.

*The tax totals are higher than their table indicates, because I’ve included the expiration of the Bush tax cuts for income over $250,000, which both the Obama and Simpson-Bowles plans assume in their baseline.

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