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Economic and Domestic Policy

End the deficit? The numbers add up, but not the votes.

Erskine Bowles and Alan Simpson, co-chairs of President Obama's deficit commission, stepped out with their own proposal.
Erskine Bowles and Alan Simpson, co-chairs of President Obama's deficit commission, stepped out with their own proposal. (Alex Brandon)

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Wednesday, November 24, 2010

The sudden proliferation of deficit-reduction plans is a reminder that the deficit is, at its heart, a math problem. To get the budget into "primary balance" in 2015 - that's wonk-speak for a balanced budget before interest payments, and it's the target everyone is trying to hit - we need $225 billion in savings and new revenue. And you know what? That's not so hard.

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You get there by adding taxes and subtracting spending. As the differences between the various plans suggest, there are a lot of ways to do that. Alan Simpson and Erskine Bowles, the Bipartisan Policy Center, Rep. Jan Schakowsky (D-Ill.) and the conservative Americans for Tax Reform all have their own proposals, with their own unique mixes of policy suggestions.

Resolving the deficit, however, requires a different sort of math. The equation is almost insultingly simple: 218 + 60 + 1. That's a majority in the House plus a supermajority in the Senate (though you could do this through budget reconciliation, meaning you only need a majority) plus a signature from the president. This math problem, however, is almost impossible to solve. That's because the politicians don't agree, and perhaps more important, neither do the people.

A CNN poll released Nov. 18 found that Americans oppose pretty much any spending cut imaginable. Avoiding cuts in Medicare, Social Security, Medicaid, the mortgage-interest deduction, farm subsidies and college loans was judged more important than reducing the deficit. Americans were willing to sacrifice arts funding and pay for federal workers, but that doesn't get us very far. And poll after poll shows that Americans want the bulk of the Bush tax cuts extended.

When you put it all together, you're left with the real problem: Americans' preferences for spending and preferences for taxes don't add up.

As you might expect, that incoherence extends to their lawmakers, too. The Simpson-Bowles commission was formed by an order from President Obama on Feb. 18. But that wasn't a victorious day for deficit hawks. The order was an unwelcome fallback position that deficit hawks found themselves in after their first choice - legislation co-sponsored by Sens. Kent Conrad (D-N.D.) and Judd Gregg (R-N.H.) that would have created a fiscal commission housed in Congress and armed with the power to fast-track its recommendations through both the House and the Senate - was filibustered in the Senate. The president's commission has no similar procedural advantage.

Back then, however, no one called it "the Simpson-Bowles commission." It was the "bipartisan National Commission on Fiscal Responsibility and Reform," or "the fiscal commission," for short. It became more tightly associated with its co-chairmen when they released their own proposal this month. Simpson and Bowles did so ahead of the full panel because they realized the options they were developing weren't going to attract the 14 of 18 votes necessary for passage, and in fact would probably be leaked by members who disagreed with them. Better to get the plan out on their own terms, they figured.

Schakowsky was one commission member who wasn't happy with what the co-chairmen released. She thought the proposal would fall too heavily on the backs of the poor and the middle class. So she released her own plan, this one centered on defense cuts and taxes that would affect mainly the rich and corporations (though some have pointed out that taxes on corporations quickly get passed on to customers), and with the added sweetener of some immediate stimulus spending.

Meanwhile, the Bipartisan Policy Center has had its own panel working on the deficit. That effort, led by former Democratic Office of Management and Budget director Alice Rivlin and former GOP senator Pete V. Domenici (N.M.), was on track to produce a report shortly before the Simpson-Bowles commission - on which Rivlin also serves - was slated to offer its release.

Then Simpson and Bowles jumped ahead, leaving the Rivlin and Domenici report behind. But the Bipartisan Policy Center quickly carved out its own niche among the capital's center-left wonks, who were drawn to its specificity, and its embrace of stimulus spending. "This plan," said the New Republic's Jonathan Chait, "looks a lot more solid."

The anti-tax warriors at Americans for Tax Reform were not happy to see all these plans embracing even modest increases in taxes. So they released their own. But center-right observers, such as the Manhattan Institute's Josh Barro, quickly noted that it relied on optimistic assumptions about interest rates and a lot of spending limits that seemed impossible to reconcile with a functioning government.

For all the publicity they've generated, these plans haven't won much broad-based support on Capitol Hill or elsewhere in Washington. For its part, the White House is sticking to a wait-and-see approach until the Simpson-Bowles commission issues - or doesn't issue - its final report. But the commission, the only one staffed by current lawmakers, is not expected to achieve consensus, or even get close.

So we're left with many budget options, but few votes. We've solved the first problem multiple times over, but haven't even made a real start on the second.

kleine@washpost.com



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