Faced with anxiety in financial markets about the huge federal deficit and the potential for it to become an electoral liability for Democrats, the White House and Congressional leaders are weighing options for narrowing the gap, including a bipartisan commission that could force tax increases and spending cuts.
But even the idea of a panel to bridge the partisan divide has run into partisan objections. Many Democrats, including in the White House, are loath to cede such far-reaching decisions to a commission and doubt Republicans’ willingness to compromise. And most Republicans remain adamantly opposed to tax increases, leaving the prospects for any bipartisan approach limited at best.
The proponents, however, are pressing for a Senate vote this month. “If we have the same process and the same people, we are going to get the same results,” said Senator Evan Bayh, Democrat of Indiana, who recently met with Mr. Obama to discuss the idea. “The Democratic Party wants to spend more than we can afford; the Republican Party tends to want to cut taxes more than we can afford. So we are stuck.”
First, there’s no evidence to suggest there is “anxiety in financial markets” about the U.S. budget deficit. The opposite appears to be true.
Second, Evan Bayh recently voted to “reform” the estate tax, cutting taxes for the extraordinarily rich, at a cost of $750 billion over the next decade. To pay for it, he recommended … nothing. The costs would simply all be added to the deficit. I hope he’ll forgive my skepticism about his credibility on the subject of fiscal responsibility.
What’s more, this notion that both parties are to blame — Dems want to spend too much, Republicans want to cut taxes too much — may feed into conventional wisdom, but it’s both lazy and wrong. Republicans decided to spend hundreds of billions of dollars on wars in Iraq and Afghanistan, didn’t even try to pay for it, and added the costs to the deficit. Republicans did the same thing boosting Medicare spending, adding all of the costs for Part D to the deficit, and with No Child Left Behind, adding all of the costs to the deficit.
GOP policymakers took the largest surplus ever and created the largest deficit ever. I know everyone is always supposed to believe at all times that “both sides are equally to blame,” but reality should have some relevance here.
Nevertheless, less than a year into President Obama’s first year, 10 members of the Senate Democratic caucus are looking to force the issue. It’s not enough that the president’s budget proposals already project deficit reductions, and it’s not enough that health care reform would also reduce the deficit if it passes. These 10 want a “commission,” along the lines of the commission to close military bases, which would apparently be tasked with cutting Medicare and Medicaid.
What’s more, they may use the upcoming vote on raising the debt ceiling as a way to force a commitment on the issue.