Congress To Itself: Please Stop Me Before I Increase Spending Or Cut Taxes Again
CG&G's very own Bruce Bartlett sends me a copy of a letter to Senate Majority Leader Harry Reid from 10 U.S. senators that asks Reid to support some version of the legislation introduced by three sepaarte groups of other senators that would create a budget commission or some other special process to deal with the deficit. Bruce used different language in his note to me but he essentially asked "WTF?".
When Congress can't or won't do something about the budget, it typically suggests that something be done about the budget process. That's what's happening here. The letter to Reid says "Congress needs to adopt a special process..." because the senators "do not believe that action...will occur under regular order..." They specifically ask that new process be included in the debt ceiling increase that will be needed by the end of this year.
It's not going to happen or, if it does, it's not going to make any difference. Here's why:
1. There's not enough time to get any agreement on a new budget process or a budget commission by the time the debt ceiling legislation will be needed.
2. Budget process changes are effective only if they happen after a political consensus is reached about what needs to be done. In this case, everyone wants to do something but there's no agreement on what it should be. There's no way, therefore, that a budget process could get through the political gauntlet that will exist on Capital Hill in the absence of a consensus.
3. The only thing that might be able to be adopted would be a process or commission so weak that it won't be able to do anything.
4. A commission or other special process will never be able to take the politics out of spending and taxing decisions that are inherently political. Given that changes in law would be involved, Congress and the White House eventually would have to approve what the commission recommended anyway and a majority almost certainly doesn't exist to do that. If it did, the commission wouldn't be needed in the first place.
Stan and Bruce, I disagree
Stan and Bruce,
I disagree with the apparent view that you guys have that we shouldn't bother with process changes such as the SAFE commission proposal. Yes, there is always the potential drawback of process changes being a distraction or even deliberate diversion from the hard choices needed to solve a problem. But first, that possibility should be considered in the context of what progress seems likely in the absence of efforts at process change and how much of that progress would be put at risk by such process change efforts -- and in this case I'd say that this opportunity cost would be relatively small. Second, what such process changes have at least the potential to do is to positively affect the political calculus by providing cover for fiscal responsibility and raising the political cost of fiscal irresponsibility. Sure, ultimately the recommendations of a commission or other process changes are not binding on Congress, but such initiatives and process changes can serve as P.R. tactics, potentially affecting the balance of public sentiment toward the fiscal responsibility/irresponsibility vs. unpleasant sacrifices, and thus making fiscal responsibility more (or closer to) a factor that improves chances of re-election (and political career prospects more generally) for members of Congress.
That's the name of the game. Change the political calculus -- how many votes are gained vs. lost if/when a member of Congress chooses to increase taxes and cut projected spending. It's a P.R. battle. Get more people to be less likely to vote for the pandering politician maintaining this "tragedy of the commons" course and more likely to vote for the politician who talks straight(er) and acts (more) responsibly.
I find it unlikely that establishing mechanisms such as the SAFE commission would do more harm than good, and I think such initiatives have a reasonable chance at significantly positively affecting the political calculus, and thus, given how far we seem to be from fiscal responsibility as is, such initiatives should be pursued vigorously. It may feel good to just scoff at such efforts because those lame politicians really shouldn't need to set up mechanisms to embarrass themselves into responsibility or to provide political cover for responsibility, but that ignores the critical and obvious reality: they do.
Commissions
If Congress were serious about using some sort of commission to reduce the deficit it would do so under the same sort of fast-track procedure used for trade negotiations. That would ensure that whatever the commission came up with would get an up-or-down vote in Congress. If all the commission does is make recommendations then it is a waste of time that will only put off the day when action is taken.
Bruce, Such a "fast track",
Bruce,
Such a "fast track", up-or-down vote is indeed what is envisioned by the cosponsors of the SAFE Commission bills in the House and Senate. Quoting from a 7/23/09 press release from sponsor of the Senate version, Sen. Voinovich:
Modeled after the Defense Base Closure and Realignment Commission (BRAC) process, Congress would be required to vote up or down on the SAFE Commission’s recommendations. http://voinovich.senate.gov/public/index.cfm?FuseAction=NewsCenter.Press...
I believe I've read of some discussion of tweaks of that approach that might allow for amendments as long as the result were scored as equally effective in terms of reduction of our long-term fiscal imbalance, but I don't recall details or status of any such modifications.
To be clear, even if such a provision were not included, I would still strongly favor such a commission, particularly with the intent to bring a P.R. effort to the process and recommendations, as the SAFE Commission bill clearly envisions (notably including town hall meetings, something which hopefully the Concord Coalition could assist/advise, given their experience with the Fiscal Wake-Up Tour). But with such an action-oriented, posturing-precluding and ass-covering provision (akin to the military base-closing up-or-down vote), it makes such a commission and related legislation even more attractive.
So...Bruce, given the above, do you favor and advocate the SAFE Commission? FYI, details (I assume the most recent, but not sure) at http://thomas.loc.gov/cgi-bin/bdquery/z?d111:SN01056: and http://thomas.loc.gov/cgi-bin/bdquery/z?d111:HR01557:
Revenue
The #1 budget problem is loss of revenue due to high unemployment. As was demonstrated under Clinton, the budget can come into balance with reasonable tax rates IF unemployment is under 4%. As long as unemployment is this high, the loss of revenues coupled with the increased demand for benefits and services by the unemployed leaves a huge hole in any budget. The hole will fester until the unemployment issue is addressed.
Bush tax cut policies proved that tax cuts do NOT create jobs. We had a decade of tax cuts and ZERO net jobs created. The part of the recent "stimulus" that created or saved the most jobs was direct money to the states. The tax cuts proved worthless. Congress needs a jobs program to break the downward employment-demand cycle that is causing deflation. If that cycle can be reversed, the budget automatically improves because of increased revenue and decreased benefit payout. Since the downturn is almost 40% of the budget deficit, it needs the most attention. Since the tax cuts are not creating or saving jobs, the Bush tax cuts need to expire, especially the estate tax. That extra revenue should be invested in job creation.
A special commission is not necessary. If the Bush tax cuts expire and unemployment returns to 4% we would return to Clinton era budget deficits and surplus.