StanCollender'sCapitalGainsandGames Washington, Wall Street and Everything in Between



A Deficit Reduction Commission Is Coming

06 Nov 2009
Posted by Pete Davis

Commissions rarely have much impact on Washington policymaking, so why do we have such a long string of them?  Because political leaders want to convince their constituents that they really stand for whatever the commission is set up to do, when, in fact, the laws they're voting for do the opposite.

Bruce's post lists them.  Most recently, President Bush's Tax Reform Commission did an unusually good job, only to find their work was for nought.  The Kerrey-Danforth Commission did an excellent job on entitlement reform, leading to welfare reform, but not much else.

The Greenspan Social Security Commission has more mythology surrounding it than most commissions, and I take every opportunity to disabuse people of the idea that this was the beacon for Social Security reform.  I was there on the Senate floor in early 1983, when we were a few months away from not having enough money in the Social Security Trust Fund to pay benefits, as a I recall, on May 1, 1983.  Mr. Greenspan and his fellow commissioners had met for months and were secretly deadlocked, despite optimistic public statements.  Members of Congress were uniformly terrified of raising payroll taxes or cutting benefits, both of which obviously had to be part of any real solution.  Then, one late afternoon, Pat Moynihan (D-NY) walked across the floor to talk to Senate Finance Committee Chair Bob Dole (R-KS).  I couldn't hear what they were saying, but it didn't take a rocket scientist to realize the topic was Social Security.  They cut the deal in broad outline right there, fed it to Mr. Greenspan, and left the details to his Commission. So at the last minute, Republicans and Democrats locked arms around a plan "to save Social Security" by raising the payroll tax, to shave benefits, and to very gradually raise the retirement age on future retirees.  President Reagan endorsed it, and the rest was history.  Like a lot of bad economic theory, the idea that the Greenspan Commission solved the 1983 Social Security crisis has the causality backwards.  Dole and Moynihan fed the deal to the Commission, not the other way around.

Commission just provide political cover for good or for ill.  It would be nice to think that a deficit reduction commission could lift the massive burden we've just left for our kids to pay for, but our elected representatives will have to do the heavy lifting first if it's ever going to happen, just as with Social Security reform in 1983.

Pete, Your post seems like

Pete,

Your post seems like it's arguing that commissions are (for the most part and/or usually) worthless, but then you write, apparently dismissively, "Commission[s] just provide cover for good or ill".

No, not "just" provide cover; that's largely the whole point. Therein lies the potential for a commission to make achievement of politically difficult but responsible policy more likely (or more likely to happen sooner rather than later, amid crisis or at least requiring even greater sacrifice to address an even greater, accumulated problem).

Sure, there is certainly the possibility that a SAFE Commission (or commissions generally) will achieve nothing either directly or indirectly, and there is indeed the possibility that such commissions could have an adverse effect, if they provide politicians cover for inaction and thus for irresponsibility by enabling the pretense of responsibility.

But those possibilities have to be weighed against the probability of responsible action (anytime soon, or within any given time frame) without a commission and the differential between that probability and the probability of responsible action with a given commission (structured, hopefully, in a way conducive to substantive action either directly or in terms of moving the needle on public opinion and achieving change indirectly).

All things considered, Go SAFE Commission !!

And yes, smart/optimal structuring the commission and related resources and processes is important, and I'm glad to see Bruce's effort to offer constructive suggestions, whether or not he thinks such a commission is worthwhile or even a good thing.

FYI, a January, 2007 view http://online.wsj.com/article/SB116961153438185994.html


Commissions

Brooks, fair enough.  I've seen too much good work wasted in commissions that never got past the reporting stage.  Once in a while, they do prove useful, mostly indirectly.  I just don't want the public to be mislead into thinking that because we've appointed a deficit reduction committee we've done much.


Check out Evan Bayh (2016 prez nominee)

Check out opinion piece by Sen. Evan Bayh regarding creating this commission http://www.cnn.com/2009/OPINION/11/19/bayh.debt.bipartisan.commission/in...

I say Evan Bayh will be Dem nominee for prez in 2016, so if it happens, you heard it here first.


Greenspan Commission

Thanks to Marc Goldwein for this email:

 

Pete,

 

Great blog post on how the 1983 commission was a cover. But even this post, I'm afraid, perpetuates some of the myth.

 

As of the beginning on 1983, the commission was all but dissolved.

 

Understanding the dire political importance of not letting the trust fund run out of money, the White House then began a series of secret negotiations with Pat Moynihan and Former SSA Director Robert Ball (who was basically representing Tip O'Neill). I believe the White House representatives were David Stockman, Dick Darman, sometimes Kenneth Duberstein, and a forth person.

 

Once they had agreed to a basic framework, then Dole was brought in, along with Alan Greenspan, James Baker, and Barber Conable. That group of nine or ten was eventually expanded further, to make sure they'd have the support of the leadership, organized labor, and enough commissioners.

 

Only then were the recommendations brought back to the commission to pass.

 

Senator Moynihan told the story a little differently. According to him, Dole wrote an editorial opening the door to tax increases and so Moynihan "read the article and went up to Senator Dole on the Senate Floor and asked if he really thought that, why not try one last time? And he did think it."

 

But this was just a cover. A piece of historical revision designed to hide the fact that Reagan and O'Neill had been supporting secret negotiations for two or three weeks already, at that point.

 

So the commission, itself meant to take negotiation out of the normal and open political process, wasn't enough. It was a cover for a cover for secret negotiations between the White House and the Speaker of the House.

 

That was the negotiation that mattered

 

The rest is just mythology.

 

 

Marc Goldwein

Policy Director, Committee for a Responsible Federal Budget

Senior Policy Analyst, New America Foundation

 

 


Discouraging

This is discouraging. I have always assumed that a commission did a lot of homework for our benefit. Apparently not. Wouldn't it be nice if politicians actually did what was right for the public instead of grandstanding and preening for image? Well, we can always dream. casino online




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