Fiscal Future Daily: What Simpson-Bowles Are Saying; Everyone’s Got an Opinion; Your Chance To CommentNov 11, 2010
Erskine Bowles and Alan Simpson, the deficit commission co-chairmen, called the plan they put out yesterday a “starting point,” and they sure started something, judging from the reaction today. It’s important to remember that this isn’t the actual deficit commission plan; it’s just a basis for the panel to discuss. So far Bowles and Simpson are speaking for themselves, and may never get the necessary 14 votes to even recommend it to Congress.
So why bother talking about it at all? Because this proposal is spurring an argument that the country needs to have: an argument over what it takes, what it really takes, to cut the deficit and control the national debt. This past election saw a lot of talk about fiscal responsibility, but most of it was pretty vague. Concrete proposals like this one make the debate come to life, as citizens and policymakers feel the impact and potential of what’s being proposed. Just to put it in perspective, the Bowles-Simpson plan would cut the deficit roughly $4 trillion over the next 10 years, with a combination of spending cuts and tax changes that are unpopular and maybe even politically impossible. By contrast, permanently extending the Bush tax cuts would make the deficit bigger by roughly the same amount over the same time period.
Getting the budget on track is about making choices, setting priorities and applying values. There’s more reaction to the plan than we could ever compile, but the positive thing is that all of the responses grapple with those questions: What’s important to the nation? What’s fair? Who pays? And what are we willing to do?
What The Plan Says
The proposal itself is 50 pages, which is a lot even in PowerPoint format. But here are some good stories summing up the proposals: from the Wall Street Journal, the the Washington Post, and the New York Times.
While much of the reaction to the commission’s ideas focuses on Social Security and tax rates, Wired’s Spencer Ackerman takes a look at deep cuts to military technology. Gone under the commission’s proposal: the Marines’ V-22 Osprey helicopter, F-35 jet, and Expeditionary Fighting Vehicle, along with the Army’s replacement for the Bradley Fighting Vehicle, and new model jets for the Navy and Air Force:
Deficit Plan Scraps Pentagon Jets, Tanks, Trucks
First, The Praise
No one in the blogosphere cheered Simpson-Bowles quite as loudly as the Atlantic’s Andrew Sullivan: “…the core proposal is honest, real, and vital:”
Drop Everything: The Simpson-Bowles Breakthrough
Harvard economist Greg Mankiw says “Early reports suggest the Bipartisan Deficit Commission is considering some good ideas: a higher retirement age, lower tax rates coupled with broader tax bases, eliminating tax expenditures such as the mortgage interest deduction, and a higher gasoline tax:”
Good Signs from the Deficit Commission
The Tax Policy Center’s Howard Gleckman calls the proposal “a remarkable plan for both reducing the federal deficit and reforming the tax code. It is remarkable because it’s tough, specific, credible, and even creative. On the spending side, it carefully spreads the pain throughout government. And on the tax side, it makes a strong case for reform and presents no less than three ways to get there:
Deficit Panel Co-Chair Plan Is Tough, Creative, and Credible, But What Next?
Diane Lim Rogers, chief economist at the Concord Coalition (but better known as @EconomistMom), looks at the tax side of the proposal and says it’s A Bipartisan and Reality-Based Way to Cut Tax Rates AND Reduce the Deficit. Really.
And Now, The Critics
There’s a lot of opposition to the proposed cuts to Medicare and Social Security. The AFL-CIO says “especially in these tough economic times, it is unconscionable to be proposing cuts to the critical economic lifelines for working people, Social Security and Medicare:
Budget Commission To Workers: ‘Drop Dead’
American Prospect blogger Adam Serwer looks at some of the proposed cuts in veteran’s benefits and Social Security, versus the tax policies, and says “as an expression of the values of political elites, this document is appalling.”
Economist Paul Krugman, in his New York Times column, calls Simpson and Bowles (see photo, above: that’s Bowles on the right) Unserious People. “OK, let’s say goodbye to the deficit commission,” writes Krugman. “If you’re sincerely worried about the US fiscal future — and there’s good reason to be — you don’t propose a plan that involves large cuts in income taxes.” And Berkeley economist Brad DeLong calls the commission “an unforced error by the Obama administration.”
Some of the criticism on health care also comes from conservatives. National Review blogger James C. Capretta says “the most important entitlement decision in the entire package is the explicit endorsement of Obamacare. The Bowles-Simpson proposal would leave in place the entire trillion-dollar monstrosity:”
The Debt Commission Endorses Obamacare.
Also at the National Review, Larry Kudlow concludes the proposal should be much tougher on spending:
Deficit Commission on Right Track . . .
Felix Salmon of Reuters says there are some good ideas in the plan but it also has “a large dash of wishful thinking, a bunch of tax cuts (!), and even a cap on the amount of tax revenues that the government can bring in. How that’s meant to help reduce the deficit I have no idea:”
The deficit commission’s plan.
It Will Never Fly
Washington Post political blogger Ezra Klein has a mixed reaction to the proposals, but argues that’s all moot anyway: the commission’s real job was to break the Congressional logjam, he says. “It’s the deadlock, not the policy questions, that they were asked to solve:”
There is no report from the fiscal commission
Salon’s Andrew Leonard agreed with Klein’s assessment on the proposal’s prospects, calling it “truly radical” and arguing that it has “zero chance of ever becoming reality:”
A truly radical debt reduction scheme
Joel Achenbach, also at the Washington Post, says the very topic is toxic. “Bowles and Simpson produced a set of bold recommendations that would end the fiscal problem in America. They were run out of town on a rail. Their own children won’t talk to them now.”
Deficit blues
Chart Of The Day
Amid all the confusion of voices, it helps to step back and look at the basics – the real fundamentals. Here’s how the government gets its money:
Join the discussion! Your voice is important. You can comment here on OurFiscalFuture.org, on Facebook, and on Twitter. And to learn more about the numbers that set the stage for some of our choices, check out our slideshow, iPhone and Android apps, and Our Fiscal Future’s Visual Budget Tool.
Fiscal Future Daily is produced by Public Agenda for Choosing Our Fiscal Future, in partnership with the National Academy of Public Administration and with support by the John D. and Catherine T. MacArthur Foundation. The editor in chief is Scott Bittle, with contributors Francie Grace, David White, Jen Vento, Hart Hooten and Tom Watson.