Lawrence J.

Haas

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February 24, 2009

Budget Commission? Bad Idea; Responsible Budgeting is Congress’s Job

As President Obama focuses the nation’s attention on the prospect of huge, long-term federal budget deficits, some experts in Congress and elsewhere will try to build momentum to create a “budget commission” that would draft a deficit-cutting plan on which Congress would then vote.

The idea is borne of frustration with soaring deficits and with Washington’s seeming inability to address them. But however laudable are the motives of its proponents, a commission is a bad idea – one that is both unnecessary and unlikely to work.

To be sure, the idea has important backers. In the Senate, the chairman of the Budget Committee, Kent Conrad, and its top Republican, Judd Gregg, have proposed such a commission. So, too, in the House have Jim Cooper, a moderate Democrat, and Frank Wolf, a moderate Republican.

So, too, in the private sector, have such budget gurus as former Clinton budget director Alice Rivlin, former Congressional Budget Office director Robert Reischauer, and top officials from think tanks and deficit-focused organizations such as the Concord Coalition and the Peterson Foundation.

The task at hand is an awesome one. The federal government will run a budget deficit this year of about $1.5 trillion, about three times the previous record of $455 billion from last year. Worse, this year’s deficit will total about 10 percent of Gross Domestic Product, marking the largest peacetime deficit as a share of the economy in the nation’s history.

What has experts really worried, however, is the long term. Even after the economy recovers from the recent downturn, experts expect the government to routinely run deficits of more than 4 percent of GDP, which they consider harmful to long-term economic growth.

For Washington to significantly reduce the deficit, policymakers will have to address every major part of the fiscal ledger. They must constrain soaring costs for Medicare and Medicaid (which reflect soaring health care costs throughout the society), restore the long-term solvency of Social Security, scale back domestic and defense programs and raise taxes by a significant amount.

In fact, Obama has already signaled that, in the economic and budget blueprint that he will release this week, he will propose to end the recent tax cuts for taxpayers who earn more than $250,000 a year, to close corporate tax loopholes and to scale back defense spending.

The problem is that on Capitol Hill, Democrats and Republicans do not see eye to eye when it comes to deficit cutting. Republicans are loath to raise taxes and they will be wary of defense cuts. Democrats are very reluctant to cut Medicare, Medicaid and Social Security.

That’s where a commission comes in. Proponents says a diverse group of outside experts can craft a bipartisan plan outside the glare of publicity – presumably with a balanced amount of spending cuts and tax increases – and persuade Congress to adopt it by a single up-or-down vote.

The theory, however, has two big problems.

First, budget commissions have failed mightily in the past. Congress established one in late 1987 to draft a budget-balancing plan and it never reached consensus, with eight members issuing one report, six members issuing another one and Congress ignoring both.

Congress established another commission in 1993, this one to draft a plan to control the soaring costs of entitlement programs. This one, too, ended its work without reaching a consensus.

Second, despite what you hear, Congress has overcome its internal differences to act responsibly on fiscal policy – not always, to be sure, but on important occasions nonetheless.

In 1990, the first President Bush worked with a Democratic Congress to enact a plan to slash deficits by a combined $500 billion over five years. Three years later, President Clinton worked with another Democratic Congress to enact another five-year, $500 billion plan.

Together, these two plans, which included tax increases and spending cuts, proved instrumental in helping Washington transform record deficits of the 1980s and early 1990s into record surpluses by the late 1990s.

That’s why we have elections – to choose leaders who will address the nation’s problems. Despite gridlock on many occasions, the system can work well, as these achievements make clear.

Facing a new set of budget challenges, a new president and Congress should get to them – not subcontract them out to a private commission that’s less likely to succeed than they are.

© 2009 North Star Writers Group. May not be republished without permission.

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