Budget Commission: Give GOP Two Weeks To Name Its Members
Republican leaders not only still haven't said whether they will name any House and Senate members to fill the six GOP slots on the presidential deficit reduction commission (formally, the "National Commission on Fiscal Responsibility and Reform") that will be created today; they have given every indication that they won't do it.
Their thinking seems to be: The commission might recommend that taxes be increased, we're against all tax increases, so we won't participate.
Note that the word is "might," and not "will," "should," or "must," raise taxes.
That makes this position a significant change from all previous budget negotiations. Past commissions began with many participants having a stated position on something but wanting to be included so that they could propound those positions to the group. It was perfectly clear they were joining the discussions as advocates rather than as objective arbiters. Now, however, the GOP is saying that it can make the point more forcefully and gain a significant political advantage by not participating at all.
This change in strategy requires that the White House also change its rules. My recommendation: Give congressional Republicans no more than two weeks to name their six members. If they don't do so within that time, relentlessly make their refusal to participate not just the issue, but the only issue. Blame the failure to deal with the deficit on this refusal.
And...most important...don't allow the commission to begin to meet until the GOP relents.
So now a commission is a good idea"
What changed your mind?
Stan Collander post on Jan 24th:
"I know and admire Diane Lim Rogers. She's a friend, colleague, and frequent co- conspirator when it comes to budget. But Brad DeLong has her number with this post: No Diane, having any budget commission is not necessarily better than not having one.
I truly wish this wasn't the case. But when, as Brad points out, a commission is really just an excuse to do less now and a subterfuge for what's really happening, I don't see the value. Given all the failed budget commissions and summits of the past and the fact that the moon and stars don't seem to be in proper alignment for one to succeed now, I'd much rather have members of Congress take their lumps at the next election for not using the power they already have to deal with the deficit than to promise for no apparent reason that somehow a commission is going to be different this time.
What would be better than a commission? A serious Ross Perot-like outside effort that so raises the deficit issue in the minds of voters that the politics of not dealing with it changes. That's when some thing will actually occur."
I recognize the primary purpose of this web site is to criticise Republicans but could you at least TRY to maintain some consistency while doing so?
Despite all he said to
Despite all he said to ridicule both the statutory commission and its supporters, I don’t know if Stan really opposed it, or if it was all just for show. Sometimes individuals, upon viewing a proposal that they consider unlikely to be fully successful and/or as likely to succeed as advertised, will publicly discount the chances of any worthwhile success all the way down to zero and perhaps also exaggerate the cost of the proposed initiative, and on that basis oppose and even ridicule the proposal and its supporters.
Why would they do that? To show their audience how worldly-wise they are. They take their justifiable skepticism borne of experience and substantial insight and make it into a hyperbolic caricature. That gets more attention in today’s highly fragmented, competitive media, and if the initiative is rejected, they’ve gained something and lost nothing, and if the initiative is less than fully successful or not successful at all they can say “I told you so. Now you see how wise I am.” Of course, there’s also the smaller chance that the initiative will commence and will be fully successful and they will look unwise, but that’s apparently a risk they are willing to take for the benefits of this strategy.
An analogy: Suppose I am offered an opportunity to bet a dime, roll a pair of dice, and if I roll a 12, I’ll win $1,000,000, and if I roll an 11 I win $1,000. The person offering the bet says to me “You’ve got an excellent chance at winning $1,000,000 and you only have to bet a dime, so you should take this bet.” Now some other guy comes over and says “Listen, I’ve seen this game played before and I’m also a particularly good statistician, and I’m telling you this guy is trying to scam you by saying you’ve got an excellent shot at that $1,000,000. You’d be a fool to take this bet. You have no chance of winning that million dollars. Zip. Zero. Believe me. You won’t win and it will cost you a bundle.”
Well, it’s true that the likelihood is that I will not win that million dollars. There is only a 2.78% chance. But it’s still a bet worth taking, since a dime is not “a bundle” to me, and the upside potential (the payout for that 2.78% chance event) is great. Also, in addition to that 2.78% chance, there is also a 5.56% chance that I’ll win $1,000 by rolling an 11 (i.e., a partial and worthwhile success), something that guy is ignoring.
I should note that, in addition to self-serving professional strategy, another element can be the emotional urge to avoid the risk of someone from benefiting undeservedly. Maybe they are just overwhelmed by resentment at the thought of the person offering the bet and exaggerating the odds of winning benefiting by suckering me into playing (after convincing me that the odds are better than they are).
All things considered (and I won’t repeat the entire case I’ve made previously), a statutory commission would have been a bet worth taking. But it’s possible that those commentators in the media voicing opposition on the grounds of supposedly zero chance of success would find it in their professional and/or emotional interest to make that hyperbolic assertion and ridicule the proposal and its supporters. It sells better.
Maybe because it's stacked
Stan,
Everything I've read suggests that the commission will contain 12 democrats and 6 republicans and require 14 votes to approve a recommendation. Let's overly generalize and say democrats will more likely favor a solution that relies heavily on tax increases (and tax increases on the wealthy, including companies) and republicans will favor solutions to make cuts in spending and entitlement programs. Not true in either case but just for fun.
Now the voting dynamics are that the democrat position to be recommended would require convincing 2 of 6 (33%) of republicans whereas the republican position would require convincing 8 of 12 (66%) of democrats. This dynamic further plays into the Rs are obstructionist meme since dems can support lots of things secure they won't pass while the Rs don't have the same flexibility.
Maybe the commission when it's announced will have less toxic composition from a pure numbers perspective. If so, I'll happily jump on your bandwagon but, until then, it does seem a pretty ugly thing for Republicans to sign on.
That said, I am strongly in favor of a commission and a solution that includes both tax increases and spending reductions to meet in the middle at 21 percent or so of GDP on both sides. However, if composed as is likely, the far more likely outcome is no material change to spending, some tax increases and ending at 21 to 22 percent in taxes and 24 to 25 percent in spending to hit the silly 3 percent target.
My mistake, it's 11-7, not
My mistake, it's 11-7, not 12-6. Doesn't change the dynamics very much, particularly since the co-chairs almost have to vote for the final recommendation, assuming there is one.
10-8
I think it is 10-8.
House and Senate 3 from each party = 6-6. President 6 members, 2 from opposite party=4-2
As I understand it
Cochairs appointed by President (1 from each party). 6 from each party in Congress and 4 more for the president. I rather doubt he will appoint any Republicans but maybe he'll surprise me. If he appoints all Ds, it will be 11-7 (assuming the Republicans participate). If he appoints one more R, it will still be 10-8.
We shall see. The appointments from Congress will say a lot about how much they want this to work versus using it as a platform to posture.
Steve, Obama must appoint
Steve,
Obama must appoint another Republican. He will appoint 6 total, including 2 co-chairs one of which had to be an R, and 4 more, with a maximum of 4 Dems including the D co-chair. In other words, one of the co-chairs is a D and he can choose max 3 more D's, leaving the R co-chair plus 1 more R.
Not quite
Obama must appoint another person willing to call themselves Republican in order to serve on the Commission (ie. a RINO). I will concede tha Alan Simpson is no RINO on defense, foriegn policy and is reasonable sceptical of tax increases but he is hardly one of the people I would put in charge of cutting spending. So we are likely to see a commission composed of 6 far left Democrats from the Hill, 6 far right Republicans from the Hill, 4 Democrat administration flunkies 1 RINO administration flunky and Alan Simpson.
Also, the choice of Eskin Bowles is somewhat interesting. This is the architect of the 1997 budget agreement which looked good at the time but does not stand up to close examination. The proposed reductions in the growth of Medicare were achieved with unrealistic reductions in reimbursement rates to doctors and hospitals, leading to the annual "Doc fix" legislation Congress must enact each year to forestall a mass exodus of service providers from the health care industry. Indeed, without this phoney savings, it is likely there never would have been nominal surpluses in 98,99 and 2000. If the goal of the commission is to produce smoke and mirrors leading to surpluses in paper while masking continued fiscal declines, Erskin is a good choice but why should the Republicans join in such a farce?
The 1997 budget agreement also established the Biparisan Commission on Medicare that produced more serious recomendations for long term healthcare reform. These recomendations were supported by 11 of 18 members of the commission but failed to gain the necessary 12th vote on the direct orders of then President Clinton. The entire excercise became a club for Clinton to use (successfully) against Republicans in the 1998 elections and then abandon when it no longer filled that need. Again, great upside for Democrats but why should Republicans play along?
Meh
Brooks,
He probably will although the letter of the order says "another party" not necessarily a Republican. He could, for instance, appoint Joe Lieberman and comply but I doubt he will.
He could appoint a whole host of people who identify themselves as Republicans but are more than willing to raise taxes as a primary lever, many of whom post here or on Frum.
My general point, I think, still holds. The makeup of the commission is a thumb on the scales of a solution that favors raising revenue. I don't think that makes it bad but it does tell you what the outcome is likely to be. Given that, I should be happy with the very modest challenge the President has set out.
Steve, I wasn't making any
Steve,
I wasn't making any point, just correcting your tally.
Obama and the Dems do have the upper hand, or at least Obama has the opportunity to have the upper hand, and I assume he'll take that opportunity. The most that can be said from the conservative end is that any recommendation would require the votes of at least 2 commission members appointed by the Republican leadership. At least that much is something I assume Obama will bear in mind in his appointees, because he needs enough Dems to vote for something that can also get the votes of at least 2 of those Republicans appointed by the Republican leadership. Hopefully he gained some related insight from the health "reform" battle even within his own party -- the House being too far to the left to agree to something that could also get the needed centrist/moderate Democratic Senators.
Stan, Re: Their thinking
Stan,
Re: Their thinking seems to be: The commission might recommend that taxes be increased, we're against all tax increases, so we won't participate. Note that the word is "might," and not "will," "should," or "must," raise taxes.
Let's be real here. If a commission produces any meaningful recommendation at all (i.e., meets the supermajority requirement), the recommendation will surely include tax increases, so you pick a rather weak basis for criticizing those Republicans when there is a very strong basis -- that they refuse to accept any tax increases even though they know that it is completely (politically) unrealistic to expect that we will solve the problem without tax increases, meaning they are, in effect, letting their ideological "perfect" be the enemy of the "good" (as are their hyperpartisan counterparts on the left*), knowing that the result is that America will continue marching toward that fiscal and economic cliff.
* And please, let's have a single standard. Call out the many Democrats who voted down the stronger, better Conrad-Gregg commission legislation on exactly the same basis: unwillingness to compromise at all vs. their ideological ideal.
I wish I were as optimistic as you are Brooks
I strongly suspect (and would be willing to wager) that the commission will propose relatively little in terms of specific spending reductions. The simple reason is they won't need to.
Taking the OMB budget as a baseline, the commission only needs to cover about .75% of GDP in 2015. That will be relatively easy to do via some form of VAT or other tax increase. I know you agree that the target (3%) is unreasonable but that's the target they have.
So if you want a guess at the outcome, I'll give you one.
1. Extend the "spending freeze" to all discretionary spending. This saves you about $40 billion or .25% of GDP (using the CBO baseline forecast)
2. Enact a new tax (VAT or some variant). To get .5% of GDP in an economy that is 60ish percent Consumer spending, you need about a 1% VAT to close the gap. This will sound modest in the context of all of the rigamarole that's going on.
3. Reinforce some nice process stuff (e.g., PAYGO, some technical budgeting stuff).
4. Make noise about but don't actually make any suggested changes in entitlement programs in the long term. Perhaps they will go as far as suggesting an increase in the eligibility age and allowing the SS taxes to further scale but I doubt it.
Note that 1-4 meets the letter of the ask that the President has put forward. It ignores a bunch of things but, as a package, it will be quite tolerable to the President and to (many) democrats.
I further expect that HCR will be entirely ignored by the commission as "in process"
Color me a skeptic.
I'm a skeptic, too, not
I'm a skeptic, too, not "optimistic" (although I suppose everything is relative). I wouldn't take even odds on a bet that the commission will produce a plan that will very substantially mitigate the long-term fiscal imbalance, and that is then enacted. As I've said all along, the odds are against it and would have been even for the Conrad-Gregg, statutory commission, but even this presidential commission is worth doing, considering all the potential outcomes (various degrees of possible success vs. potential costs) and respective probabilities, as well as potential eventual impact even if nothing comes of the commission's work.
For more of a reply to your comment, see my reply over at EconomistMom. And as I also assert over there, Obama really needs to step up and lead using that bully pulpit to increase the chances of success, and that would mean his shifting from empty lip service about "tough choices" and "not kicking the can down the road" to actually talking straight about those tough choices and challenging the American people to accept substantial sacrifice. In other words, Obama needs to show some onions he hasn't shown yet (I hope no one is offended by that metaphor. If so, let me know.).