–Rather Than Fading From View, Fiscal Report Influences Budget Debate
–President Obama, Hill Leaders Frequently Refer To Report As Template
–Budget Expert Says Simpson-Bowles Is Now The ‘Touchstone’ of Debate
By John Shaw
WASHINGTON (MNI) – The history of reports on fiscal policy
generated by blue ribbon commissions in the U.S. is not a positive or
encouraging one.
For at least the past 30 years, a number of panels chaired by
prominent Americans have generated broad plans to overhaul U.S. fiscal
policy.
But these plans have quickly faded into obscurity.
But the fiscal plan assembled by the National Commission on Fiscal
Responsibility and Reform at the end of 2010, often referred to as the
Simpson-Bowles report, continues to influence the fiscal debate in the
U.S. six months after its release, budget experts say.
“The Simpson-Bowles report took a lot of ideas about cutting the
budget deficit and put them into a pretty coherent policy framework,”
says Bob Bixby, executive director of the Concord Coalition.
“The plan identified the scope of the problem in a clear and
persuasive way. It had bipartisan support which gave it bipartisan
credibility. It has become the touchstone of the debate on fiscal
policy. That’s pretty impressive, surprisingly impressive,” Bixby said.
“I was as skeptical as anyone about Simpson-Bowles,” says a
congressional budget staffer who asked not to be identified. “But it has
had surprising resonance. I think that’s party because it was a
presidential commission and had two pretty strong, credible chairmen who
have been willing to keep selling their plan.”
“And everyone who is serious about cutting the deficit is looking
for some kind of anchor to make progress,” he adds.
The two co-chairmen of the National Commission on Fiscal
Responsibility and Reform, former senator Alan Simpson and former White
House chief of staff Erskine Bowles, said when they released their plan
last December that they wanted to reshape the nation’s fiscal debate.
The Simpson-Bowles plan calls for about $4 trillion in deficit
reduction between 2012 and 2020. To achieve this, they call for $1.6
trillion from discretionary savings, $556 billion in entitlement
savings, $785 billion by scaling back so-called “tax earmarks,” and $673
billion in interest savings.
The plan would bring the federal budget deficit down to 2.3% of
gross domestic product by 2015. It would reduce the nation’s debt to 60%
of GDP by 2023 and to 40% of GDP by 2035.
To achieve these fiscal goals it would force sweeping changes to
the federal budget, changes far beyond what any Congress or
administration has even contemplated, let alone accepted. The plan would
wring deep savings out of every corner of the federal budget, including
defense and Social Security.
The plan calls for fiscal changes that would bring federal spending
down to about 21% of GDP and boost revenues to bring them up to 21% of
GDP.
Bixby of the Concord Coalition notes that when President Obama
released his fiscal year 2012 budget in February, he was pressed to
explain why it didn’t include more elements from the Simpson-Bowles
plan.
He also says that Rep. Paul Ryan, the chairman of the House Budget
Committee, emphasized that he incorporated many of the elements of the
Simpson-Bowles package into his budget when he released it in March.
Senate Budget Committee Chairman Kent Conrad has also said the
Simpson-Bowles plan served as the starting point of the so-called Gang
of Six bipartisan budget talks that have taken place in the Senate.
Conrad added that the Simpson-Bowles plan has also influenced his
thinking as he considers a Senate Democratic budget.
Stan Collender, a budget expert at Qorvis Communications, said he
believes the importance of the Simpson-Bowles report has been
exaggerated.
“It offered no new ideas, no real specifics, no real coherence. I
believe it was another failed budget commission,” he said.
“The budget debate is as stalled now as its ever been,” he added.
** Market News International Washington Bureau: (202) 371-2121 **
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