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  • Time’s up for the President’s Deficit Commission

    Today marks the deadline for the President’s National Commission on Fiscal Responsibility and Reform to vote on a proposal to reduce the federal deficit and put runaway entitlement spending on a sustainable path. From the current looks of things, it is unlikely that the labors of the bipartisan commission will result in little more than the expected partisan gridlock.

    Though the supermajority needed to send a proposal to Congress may not be in the stars, several members of the commission have offered their own proposals to successfully open the dialogue on fiscal reform. Co-chairs Erskine Bowles and Alan Simpson offered solutions to tackle discretionary and entitlement spending while also addressing some elements of tax reform. Heritage expert Alison Fraser writes that, though the co-chairs’ report includes some fundamental flaws, the co-chairs “are to be commended for putting out a plan that addresses the fiscal issues confronting the nation.”

    Following the Bowles–Simpson Report was the proposal of the Bipartisan Policy Center’s Debt Reduction Task Force, co-led by former Congressional Budget Director Alice Rivlin, a member of the President’s deficit commission, and former Senator Pete Domenici (R–NM). This comprehensive proposal, too, included both positive and negative elements, some of which are worthy of further debate. And finally, Rivlin and Congressman Paul Ryan (R–WI) offered a path forward to transforming Medicare and Medicaid to reduce their tremendous long-term unfunded obligations while also better serving patients.

    These proposals are promising steps forward, though it remains next to impossible that the commission will agree on any of them. To avoid stalemate, the commission should instead pivot to budget process reforms capable of receiving bipartisan support. This would create the right conditions to ultimately put the nation’s fiscal house back in order.

    Specifically, Fraser recommends that Congress “disclose the long-term entitlement obligations in the budget resolution, providing lawmakers and the public a much fuller understanding of the current and future budget outlook,” “require that a similar long-term assessment for Medicaid be made by the Centers for Medicaid and Medicare Services,” and “set a firm limit on these obligations, with Members being required to vote on whether they will increase these costs on future generations.”

    Most importantly, entitlements should be taken off the budgetary autopilot they now enjoy “by creating a long-term budget window—30 years, for example. All spending would be reviewed regularly every five years, and Congress would be required to take action to keep the programs within this budget framework, with some form of automatic triggers put in place if Congress does not act.” The Bipartisan Policy Center’s proposal takes an important step in this direction.

    The silver lining from the commission’s apparent standoff is that it is now unlikely that there will be any proposal for the current lame duck session of Congress to consider. This original expectation was deeply flawed, as Heritage’s Stuart Butler pointed out from the beginning.

    The commission’s deliberations have succeeded in opening a serious conversation in Washington and sparking a national discussion not only on the gravity of the United States’ fiscal situation but also on some of the transformational solutions. It is now up to the new Congress to take the reins and pursue reforms that would reduce spending and put the federal budget once again on solid ground.

    Posted in Economics [slideshow_deploy]

    2 Responses to Time’s up for the President’s Deficit Commission

    1. KELLI2L, USA says:

      I just don't get the way our leaders think. . . . They complain about Entitlements spending – - yet this administration wants to pile on even more entitlements – - it is desperately trying to pass the "Dream Act" which only benefits illegal immigrant law-breakers !!! . . . . It makes NO SENSE to me !!! . . . . Our citizens should be banging on the WH doors over this one. . . .

      We must have entitlement programs (because our workers don't make enough in salary to take care of lifes needs), but they should ONLY be for American citizens. . . . .

    2. Paul, San Francisco says:

      You are clearly missing the point. If these measures aren't passed all your budget claims will be for naught. We are broke, probably already beyond repair, and no congress is going to periodically deal with something they created. When the bond vigilantes start tearing us apart like the are doing with the EU, it will all have to be done but it will be piece meal. They will start with Michigan or Illinois. Treasury will have to come in and deal with the tough issues. California is like Spain only worse, probably impossible to repair. There will be many defaults just as we are seeing in Europe now. If the Federal Government isn't in order to bail out the states then the whole house of cards comes down, most likely with hyperinflation. Sad state of affairs but i have been predicting this for 25 years and each year it is ever more clear we are approaching the precipice.

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