–White House’s Simpson-Bowles Panel To Hold First Meeting April 27
–Several Other Key Panels Are At Work on Fiscal Recommendations
–Budget Experts Say Steps Ahead Are Well Known, But Politically Hard
By John Shaw
WASHINGTON (MNI) – It’s at least a modest irony that the commission
recently created to address the U.S.’s long-term fiscal challenges which
has attracted the most attention is probably the least likely to yield
an agreement for policymakers to consider.
The recently established National Commission on Fiscal
Responsibility and Reform will begin its public sessions on April 27,
but analysts believe the panel’s deliberations may be stormy and
inconclusive.
Chaired by former senator Alan Simpson and former White House chief
of staff Erskine Bowles, the commission includes the chairmen and
ranking members of the Senate and House Budget committees, the chairman
of the Senate Finance Committee, and a former White House budget
director and vice chairman of the Federal Reserve Board.
But the panel includes some of the fiercest partisans of recent
budget battles, including five congressional Republicans who appear to
believe that tax increases should be off the table for fixing the U.S.’s
fiscal challenges.
These lawmakers, including Sens. Tom Coburn of the Senate Health
Committee, Mike Crapo of the Finance Committee, Rep. Paul Ryan, the top
Republican on the Budget Committee, Rep. Dave Camp, the top Republican
on the Ways and Means Committee and Rep. Jeb Hensarling, a member of the
Budget Committee, argue that resolving the nation’s fiscal problems
should occur almost exclusively on the spending side of the ledger.
President Obama created the Fiscal Responsibility Commission on
Feb. 18 by executive order after an attempt by lawmakers to create a
panel by statute failed in the Senate.
The commission is charged to issue a report by Dec. 1 that would
cut the deficit to about 3% of gross domestic product by fiscal year
2015 and begin slowing the growth of debt over the long term.
In order for the panel to issue recommendations, 14 of the 18
members need to reach an agreement.
Analysts say it will be very difficult for this panel to reach an
agreement, but some hope the debate generates ideas that could be useful
in future budget deliberations.
“I would not be inclined to hold my breath for this group to reach
a conclusion that gets the needed majority,” said Bill Frenzel, a former
Republican congressman who is now a guest scholar at the Brookings
Institution.
“This is not a deal making bunch,” he added.
Most budget experts argue that a credible fiscal package would
include reforms to Medicare, Medicaid, Social Security and the tax code.
In addition to the Bowles-Simpson commission, there are other
efforts underway to outline steps to shore up the nation’s weak fiscal
position.
The Pew-Peterson Commission on Budget Reform began working in
January, 2009 and will continue to deliberate until December, 2010. The
panel of budget experts is trying to outline a bipartisan package of
fiscal changes to tackle massive budget deficits.
The Bipartisan Policy Center has created a fiscal task force that
will be chaired by former Senate Budget Committee Chairman Pete Domenici
and former White House director Alice Rivlin.
Rivlin, who is also a member of the presidential budget panel, has
said some mix of spending cuts and tax increases is needed.
The National Academy of Public Administration and the National
Academy of Sciences sponsored a two-year study of fiscal challenges
which was released this year. It lists dozens of options to restrain
spending and overhaul the tax code.
A group at the National Defense University has recently released a
package of recommendations about controlling the growth of Medicare and
Social Security, arguing that American fiscal reform has now become a
critical national security challenge.
For example on Social Security, it says a package that would change
how Social Security benefits are indexed, expand the scope of Social
Security taxes so it extends to all earnings not just those up to
$106,800, gradually increase the eligibility age for Social Security,
and means test Social Security benefits so that higher income recipients
receive fewer benefits than less wealthy ones do.
The Peterson Foundation is hosting a day-long fiscal summit on
April 28 and will hear from former President Bill Clinton, former
Federal Reserve Board Chairmen Paul Volker and Alan Greenspan, former
Treasury Secretary Bob Rubin and White House budget director Peter
Orszag.
Additionally, every year the Congressional Budget Office issues a
report with hundreds of options to control spending and boost taxes to
confront the deficit.
“There are a lot of ideas that will be available for those who want
to solve our fiscal problem. Candidly, I’m more worry about our
political will than our ability to generate ideas,” says Bob Bixby,
executive director of the Concord Coalition.
Bixby said that he has “some hope” that Congress and the White
House will begin to seriously engage in fiscal talks next year. He adds
that it would “make a lot of sense to begin with Social Security.”
“I think it would be possible to assemble an agreement on Social
Security in 2011 that could begin building confidence and solving our
fiscal problem. I’m not predicting it will happen, but it could and
should,” he said.
Frenzel, of Brookings, said he fears that a fiscal crisis will be
needed to generate the political momentum for serious talks on tackling
the nation’s budget problems.
“Obviously, we should have acted by now. We should act this year.
We should act next year. But I’m afraid we’ll need a crisis to get
everyone’s attention and start doing the things we need to do,” he said.
** Market News International Washington Bureau: (202) 371-2121 **
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