What Makes Deficit Reduction “Undemocratic”?
December 3rd, 2009 . by economistmomA group of over 30 national, “progressive” organizations released this statement (and sent to the President, key Administration officials, and every member of Congress) on Wednesday, decrying the idea of a bipartisan deficit-reduction commission as “undemocratic.” Why? From the statement (emphasis added):
[T]he current effort to reform the health care sector seeks to achieve reductions in Medicare spending, without cutting benefits. But the proposed budget commission—which will be viewed as a way to actually cut Medicare benefits, while insulating lawmakers from political fallout—could confuse people and undermine the reform effort. And an American public that only recently rejected privatization of Social Security will undoubtedly be suspicious of a process that shuts them out of all decisions regarding the future of a retirement system that’s served them well in the current financial crisis.
We urge you to act decisively to prevent the creation of such an extraordinary and undemocratic budget commission.
The suggestion from these groups is always that those who claim they want to “fix” the fiscal sustainability of the entitlement programs actually want to undermine and destroy the programs. But Senators Conrad and Gregg, the chairman and ranking member of the Senate Budget Committee, issued this statement in response to explain that:
“One of the main purposes of our Bipartisan Fiscal Task Force is to protect and preserve Social Security and Medicare for current and future generations. The fact is both Social Security and Medicare are currently cash negative and headed for insolvency. People who care about Social Security and Medicare should be joining us in this effort…
“More broadly, our country’s long-term economic well-being is at stake. If we fail to act, the projected explosion in federal debt will not only threaten the federal government’s ability to continue providing support for Social Security, health care, education, defense, and other critical priorities, it could literally swamp our economy and throw us into an economic tailspin far worse than anything we have seen before. This would especially hurt the most vulnerable in our society – the very people these groups are correctly seeking to protect. We can’t allow that to happen.”
The progressive groups’ statement claims that the commission “could confuse people and undermine the reform effort.” But to the contrary, a commission focused on deficit reduction would clarify that there’s no such thing as achieving fiscal sustainability by either cutting only “wasteful” spending and not anyone’s “benefits” or raising taxes only on (evil) businesses and not any “real people.” The groups that signed this statement don’t want to see entitlement benefits cut–not in any way, not even by cutting only those benefits that go to those who don’t need them (such as the very rich). A deficit-reduction commission is likely to say that yes, some entitlement spending will need to be cut, and yes, that’s likely to involve some persons receiving lower benefits. And because these groups don’t like that message and don’t like the policy implications of that message, they conclude that the commission idea is unrepresentative of their own preferences (to ignore the need for tough choices and to perpetuate the notion that we just need to cut “waste” in the federal budget) and hence is “undemocratic.”
So now I’m anticipating a conservative equivalent to this statement where a very different bunch attacks the deficit-reduction commission for its “undemocratic” tax increases.
Oh, wait. They’ve already made such a statement with their tea parties. (Those conservatives do have a way of out-dramatizing the liberals.)
If you’re attacked from both sides, you’re probably doing something right.
I’m starting to become sympathetic to the idea of a deficit commission. I was afraid it wouldn’t accomplish anything. But if these groups are afraid it will accomplish too much, then maybe there is hope after all.
I don’t want to copy & paste (possibly bad blog etiquette), but my recent comment on another thread is even more relevant here. Please see http://economistmom.com/2009/12/game-changers-curve-bendersand-teeth-pullers/#comment-5996
Bruce — I got a chuckle from your comment, but couldn’t tell if you were kidding or if you are really closer to supporting the SAFE Commission or something like it. Bear in mind that the costs (both explicit and opportunity costs) of even zero impact of the commission would be negligible, whereas the upside potential is huge, or put differently, even a small positive impact relative to the size of the problem would far outweigh the costs. (Others can see elaboration at http://capitalgainsandgames.com/blog/bruce-bartlett/1288/real-fiscal-conservative#comment-4846 ). So Bruce, [read the following in a car salesman's voice] what would it take to put you in a commission today (literally serving on one or figuratively in terms of support)? You offered some suggestions for a commission over at CG&G a couple of weeks back, and I think such constructive suggestions are great (even though I disagree with your view of the “town hall” component, which I view more as valuable P.R. than seeking public input). Your ridicule of the idea and of its supporters, however, is counterproductive. Your voice is important, so I hope you’ll get behind the SAFE Commission despite your justifiable skepticism. All things considered, the upside potential seems to clearly outweigh the costs in terms of “expected value” (probabilities X magnitudes of potential outcomes).
After the crisis hits (bond market crash or other event larger than the 2008 crisis), a commission can succeed. Until then, it cannot.
AMT,
I don’t agree that we can discount down to zero the probability of some degree of positive short-term effect on budgets, but if even if I accept your premise arguendo, if the only benefit of proceeding with the SAFE Commission now were to move Congress and the public along the learning curve in terms of policy options, trade-offs, political and economic feasibility, and a process for working out a grand compromise, it would be well worth it, because it would mean that whenever this crisis hits in your scenario, Congress will be able to respond more quickly, wisely and effectively, and the resulting benefit (the costs that are avoided) will be far greater than the cost of commission’s work.
That said, again, I don’t agree with your premise. I don’t know if the probability of the SAFE Commission’s recommendation passing and being implemented to a substantial degree is 60% or 30% or 10% or even less, but even at low probability it has a positive “expected value” given how low the costs are. And even if the recommendation isn’t passed by Congress, it is certainly plausible that the process, the related news coverage / P.R., etc., can move the needle at least a bit in terms of public opinion and Congressional leanings, which could move Congress at least more in the direction of fiscal responsibility sooner than otherwise.
Diane,
I see that on December 7 “Concord Coalition Executive Director Robert L. Bixby will be joined by U.S. Rep. Frank Wolf (R-VA) in a discussion of the report and Mr. Wolf’s SAFE Commission legislation” at the Fiscal Stewardship Project event. http://concordcoalition.org/press-releases/2009/1204/concord-coalition-grassroots-leaders-deliver-report-fiscal-stewardship
I hope video will be available on the Concord website.
By the way, was December 7 chosen because we don’t want to end up getting hit by a “fiscal Pearl Harbor”?