The article by the Fiscal Times, about growing congressional support for a bipartisan commission to address the nation's debt, contained a statement supporting the concept by Robert L. Bixby, the executive director of the Concord Coalition. The article should have noted that the Concord Coalition receives funding from the Peter G. Peterson Foundation. Peterson, but not his foundation, also funds the Fiscal Times, the independent news service that prepared the article.
Support grows for tackling nation's debt
Thursday, December 31, 2009
Senate action late last week that increased the limit on the government's credit card to a record $12.4 trillion gave a significant boost to a proposal to appoint a special commission to make the tough decisions that will be required to dig the nation out of debt.
President Obama has voiced support for such a plan, and 35 Democratic and Republican senators have signed on to legislation that would create a bipartisan commission with broad power to force painful spending cuts and tax increases through Congress.
Even House Speaker Nancy Pelosi (D-Calif.), an ardent opponent of the idea, has signaled in recent weeks that she could accept the establishment of a commission. The White House has been talking to Congress to try to craft a proposal that would not wholly relinquish congressional control over major decisions on taxes and spending.
Budget analysts say provisions to create a commission are almost certain to be tacked on to the next debt limit measure, scheduled for a Senate vote Jan. 20, or added to Obama's next budget request, due on Capitol Hill the first week in February.
"I think there's more interest in the proposal not only in Congress but at the White House because there's a growing realization the deficit and the debt are reaching such levels they can't be ignored any longer," said Robert L. Bixby, executive director of the Concord Coalition, a nonpartisan group that advocates entitlement reform and balanced budgets.
Task force proposal
The most vocal advocates of the idea are Senate Budget Committee Chairman Kent Conrad (D-N.D.) and Sen. Judd Gregg (R-N.H.), who this month jointly unveiled legislation to create an 18-member task force consisting of 16 members of Congress and two administration officials. Under the proposal, if at least 14 of the panel members reached agreement on how to rein in skyrocketing spending on Medicare, Medicaid and Social Security and reform the tax code, Congress would have to consider it immediately and give it an up or down vote, without amendment.
Obama and Democratic and Republican leaders agree that unsustainable entitlement spending and a massive accumulated public debt are threatening to undermine the nation's economy and the U.S. credit rating abroad. Over the past year alone, public debt rose sharply from 41 percent to 53 percent of the economy, according to a study by the Peterson-Pew Commission on Budget Reform. But there is widespread disagreement on how best to respond.
Conrad and Gregg want the Senate to consider their plan for a new bipartisan fiscal task force before granting the Treasury even more borrowing authority. The Senate last Thursday joined the House in voting to raise the federal debt ceiling by $290 billion, to $12.4 trillion -- permitting the Treasury Department to issue enough bonds to fund the government until mid-February. The Senate will vote again Jan. 20 on another debt ceiling bill that would extend the Treasury's ability to borrow through much of the coming year. Conrad and Gregg intend to offer their plan as an amendment to that bill.
"We believe this is the best way to accomplish the changes that are needed and to maintain them over time," Conrad said. "No one party can or will do this on its own."
Congress has been down this path of entitlement commissions before, with nothing to show for it. Sen. John D. Rockefeller (D-W.Va.) ruefully recalls the last time he sat on a high-profile panel that sought consensus on controlling entitlement spending and reducing the budget deficit.
"As soon as we started meeting, people dug their heels in and it didn't change," Rockefeller said recently, describing the meetings in the late 1990s of the National Bipartisan Commission on the Future of Medicare, a panel made up of lawmakers, experts and health-care officials.
Former senator John Danforth (R-Mo.) had his own experience in frustration when he co-chaired a similar panel from 1993 to 1995: The Bipartisan Commission on Entitlement and Tax Reform. The commission could not even agree on what to include in four-color charts illustrating the plight of the Social Security and Medicare trust funds.
What was missing from both, many budget experts agree, was a crisis atmosphere and bipartisan commitment to get something done -- the chemistry that produced the landmark "Greenspan Commission" recommendations in 1983 that helped stave off fiscal threats to Social Security.
Conrad and Gregg contend that the only way to force a consensus among the warring political factions is through a mechanism similar to the successful military base closing commissions, which prevailed in recommending the shuttering of outdated facilities five times since 1988. This method required Congress to consider the closings as a package, on a take-it-or-leave-it basis, which prevented members from protecting bases in their districts.
But critics say the problems Rockefeller and Danforth experienced could occur again because the choices are so hard -- and getting harder. John Rother, AARP's executive vice president for policy, notes that the House and Senate versions of health-care overhaul legislation would reduce the growth of Medicare and Medicaid by nearly $500 billion over 10 years, and questions whether a new commission could find additional cuts in those programs. Rother said he also doubts that a new commission could persuade Republicans to support raising taxes, a key component of any package to ratchet down the debt.
One alternative under consideration would be for Obama to appoint a task force by executive order that recommends budgetary and fiscal policy changes, but not dictate a schedule for congressional action. That would be more palatable to territorial-minded committee chairmen, but backers of the Conrad-Gregg commission dismiss that approach as toothless.
This article was produced by the Fiscal Times, an independent digital news publication reporting on fiscal, budgetary, health-care and international economics issues. Fiscal Times staff writer Adam Graham-Silverman contributed to this report.