The depth of the problems with the Gang of Six agenda

THE DEPTH OF THE PROBLEMS WITH THE GANG OF SIX AGENDA…. I argued yesterday that, as the Gang of Six “compromise” reportedly comes together, it looks pretty awful, at least from a center-left perspective. My case was built around the notion that the gang’s Democrats are simply giving up too much, in exchange for too little.

The Washington Post‘s Stephen Stromberg ran a reasoned, polite criticism of my item on this, and at the risk of sounding defensive, I thought I’d respond to the response.

[N]either the Democratic nor the Republican vision recently articulated is likely to result in the sort of reform needed to fix America’s finances in a way that achieves anything but basic solvency, if that. Nor is either party likely to get its way after 2012, anyway. Barring some truly massive electoral landslide or Matt Miller’s third-party groundswell, Republicans will still hate tax hikes, Democrats will still hate entitlement cuts, and the filibuster-era Senate will still be the filibuster-era Senate.

The Gang of Six’s plan might not be perfect. But openness to compromise is critical. For anything big to happen, both parties will probably have to betray some of their most powerful instincts, even after 2012.

I’d quibble with some of the particulars here. While Paul Ryan’s House budget plan actually runs enormous deficits for many years — even if deficit reduction is the principal goal, the GOP proposal is basically a fraud — I think it’s fair to say President Obama’s debt-reduction agenda does more than just “achieve basic solvency.” Elsewhere in the piece, Stromberg characterizes the Republican plan as “keeping taxes low,” when in fact the House GOP’s measure goes much further, slashing already-low taxes by trillions of dollars over the next decade, to the exclusive benefit of the wealthy.

But I’m probably being picky with this. The larger argument is straightforward: we have a terrible budget mess, and it needs to be addressed quickly. Any credible plan that intends to make a serious difference will involve Republicans compromising on taxes and Democrats compromising on entitlements. That, in effect, is Stromberg’s pitch. It’s not an uncommon one, and by all accounts, it provides the foundation for the Gang of Six talks.

I say “by all accounts” because the Gang of Six’s members haven’t actually disclosed their plan just yet. We’re relying on comments panelists have made in the media, and piecing the puzzle together.

And from my vantage point, the puzzle looks pretty awful. I can appreciate why “openness to compromise is critical,” and I think if one goes back over the last few months, you’ll find that I’ve consistently offered restrained analysis of the Gang’s efforts, willing to at least hear the senators out. I will, of course, still withhold judgment until I see their finished product.

But I continue to think my skepticism is well grounded.

First, I’m not even sold on the premise. I’m not at all convinced there’s a debt crisis — I am, however, convinced there’s a jobs crisis. Borrowing more money right now is cheap and easy, and if we had the political will, we could make the necessary investments to bring unemployment down in a hurry. (And nothing brings down the deficit in a hurry like meaningful economic growth.) I draw a distinction between short-term issues and long-term issues, and while I believe the latter is relevant, I believe the former is being ignored.

Second, talking about cutting “entitlements” is an overly broad word, because not all entitlements are created equal. The status of the finances for Social Security, Medicare, and Medicaid are very different, and face wildly different long-term challenges. With that in mind, the Gang of Six is targeting Social Security without cause.

Third, the Gang of Six is treating the White House’s debt-reduction plan as a liberal alternative to Paul Ryan’s plan, which is very wrong, and speaks poorly of the panel’s approach.

And fourth, the Gang of Six appears to be narrowing in on a deal that lacks balance. Democrats are reportedly prepared to accept cuts to Medicare and Medicaid, cuts to Social Security, and spending caps that will do meaningful and lasting damage. In turn, Republicans are reportedly prepared to accept some modest tax increases, which nearly all serious GOP observers recognize as necessary, and which will likely bring us back to where we were in the 1990s.

“Openness to compromise” may be “critical,” but the compromise should be balanced, equitable, and consistent with sound public policy. If the reports are accurate, the Gang of Six agenda falls far short on all of these counts.