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If We Can’t Even Agree on the Commission…

January 22nd, 2010 . by economistmom

…then how’s the commission ever going to agree on the revenue increases and spending cuts?  The Washington Post’s Lori Montgomery reports:

Key senators in both parties are resisting President Obama’s bid to create a bipartisan commission to rein in soaring budget deficits, saying the White House has failed to deliver clear assurances that a presidentially appointed panel would have the power to force a deficit-reduction plan through Congress.

Vice President Biden, Treasury Secretary Timothy F. Geithner and White House budget director Peter Orszag went to the Capitol on Thursday to try to sell the idea to a group of moderate Democrats, who are threatening to block efforts to significantly raise the nation’s debt limit if there is no plan to restrain future spending.

Far from signing on, however, the group pressed White House officials to endorse a competing proposal to create a budget commission by law, with explicit provisions to put its recommendations to a vote in the House and Senate before the end of this year…

Meanwhile, key Republicans said they would not serve on a presidentially appointed commission, arguing that the panel would do little more than provide political cover for Democrats trying to show voters they are taking action on the deficit in the run-up to this fall’s congressional elections. They, too, urged Obama to back a statutory commission, calling it the only hope for truly bipartisan cooperation on the nation’s dire budget problems…

I still don’t understand why those in Congress who truly want to achieve fiscal sustainability would oppose this commission just because it’s not as strong as a statutory commission, which they can’t pass in Congress anyway.  In helping policymakers and the American public confront the tough choices, any fiscal commission is better than none–as long as we don’t have to deficit finance the commission itself.

Are some members of Congress perhaps not as prepared to get to the tough (and specific) policy choices as they claim to be when talking only in vague terms about the very general merits of a fiscal commission?  Is their resistance to the presidentially-appointed commission a stalling and/or distancing tactic?

15 Responses to “If We Can’t Even Agree on the Commission…”

  1. comment number 1 by: SteveinCH

    Well, I see three possible answers as to why?

    1. They are trying to pressure their colleagues to accept a statutory solution by posturing to oppose a Presidential commission.

    2. They are simply playing politics and don’t want any commission whatsoever, either because it impinges on their power or for some other reason.

    3. They actually believe that a Presidential commission is worse than no commission at all.

    The most interesting argument is 3. At the risk of provoking Brooks, I think it’s a pretty close call. A lot will depend on whom the President would select for a commission (both members and, perhaps more importantly, staff). If you imagine the worst on the selection, you can get to the point where the commission will likely deliver nothing and any recommendations it comes up with will be buried without a statutory requirement.

    I don’t quite get all the way to 3 myself, hoping against hope that there is at least some educational benefit to even a weak commission. Although as I said, that largely goes to who is on the commission and what rules it has to operate under.

  2. comment number 2 by: Jim Glass

    Hey, We can’t even agree on whether past commissions were successful — 27 years after the results came in!

    There’s been a sudden series of attacks launched on the reputation of the Greenspan Social Security Commission, claiming that in fact it was a “failure”. In the NY Times, by Stan Collender, Krugman…

    The budget deficit and debt clearly are becoming a bigger issue in the public’s mind. All deficit hawks should be happy about that. Without that, no political progress on the budget can happen.

    So Congress (or a part of it) naturally enough tries to position itself on the issue, via the “Conrad-Gregg bipartisan budget commission”.

    It draws predictable attacks from both left and right (causing Bruce Bartlett to suspect there might be something good about it after all, commission skeptic that he is) … but beyond that, it actually gets some attention and traction. As this week’s election results show, the issue actually is gaining in electoral importance.

    Well, the last thing *any* White House wants is a Congress run by *its own party* running off on its own — free from White House leadership (one might even say “renegade”) — on an important issue, taking control of the agenda. In an election year!

    So the White House promptly announces its own commission to try and get things back solidly under its own control.

    So now we have a “Battle of the Commissions”. Who’s going to control the political agenda on this issue?

    Keith Hennessey compares the two in some detail. He is “skeptical” of Conrad-Gregg, but is convinced that the White House commission is just an election year ploy to push facing awkward budget issues back until after the election (certainly one of the most common uses of Washington “commissions”.)

    You can read his take and decide for yourself about that.

    The sudden attacks on the Greenspan Commission’s “failure” look to me like a pretty clear attempt to discredit Conrad-Gregg’s credibility, aimed at those to whom it may appeal. “A commission can’t work! Don’t cite the Greenspan Commission, you’re wrong, that didn’t work either!”

    Though it’s hard to see how the Greenspan commission failed. It had two purposes: (1) Come up with ideas to be used closing the then imminent SS funding gap; and even more importantly (2) Give Ron and Tip political cover enabling them to agree to raise taxes and cut benefits respectively, without being killed by their own political bases.

    Well, (1) Congress closed the gap using ideas from the commission (plus more), and (2) The deal they enacted has been known from that day to this as “the bipartisan Greenspan Commission fix” — instead of the “O’Neill SS benefit cuts” & “Reagan tax increases”. That looks pretty much like success to me.

    The NY Times story quotes George Ball, and its claim of “failure” seems based on the fact that a lot of hard work had to be put in at the end, with pressure from the political leaders, for the commission members to get to their final agreement. Instead of them all sitting around happily nodding together like a bunch of disinterested Platonic Guardians. Well, duh.

    The Times’s warning about putting hope in future commissions is pretty clear though:

    “Above all,” [Ball] added, “we should not allow ourselves to fall into the trap of expecting miracles from another Greenspan Commission — by deluding ourselves into believing, mistakenly, that the first one was a great success.”

    Even though, “great” or not, it was enough of a success to make Ron and Tip and Congress happy in solving a funding crisis for a generation, while avoiding substantial pain to themselves.

    Stan Collender says the Greenspan Commission “failed miserably” in a bunch of posts. He doesn’t say how or why, exactly … but he sure is touchy about it.

    When Hennessey made this mention of the Greenspan commission, in its entirety:

    In my experience, there are four reasons to create a commission:

    1…
    2… You want to create an external credible body of “wise men” to produce consensus recommendations to build broader political support for politically painful policy changes: 1982 Social Security Commission.
    3….
    4….

    Stan ripped back, in his own word “vehemently” with…

    “the commission Keith puts on a pedestal as a shining example of what can be accomplished — the Greenspan Commission on Social Security…

    Uh, hello? And, yeah, a pretty much vehement assault on Keith follows.

    As for Krugman, he’s now calling the Greenspan Commission resolution as enacted “three card monte” — which is a good 180 degree turn from the defense of its sterling character he gave back when the Bush SS reform proposals were around. But we’ve seen PK do such rhetorical flip turns before (Bush tax cuts: Embodiment of evil. Obama renewing them: No problem!)

    I take all these assaults on the Greenspan Commission as being “friend of the administration” attempts to kneecap Conrad-Gregg in particular, and the demand for all such other commissions generally.

    After all, if even the Greenspan commission didn’t work, what can we expect of any of them?

    Which of the two commissions is actually best?

    First, IMHO, it is dead certain lock that neither of them is going to lead to any actual legislation being enacted to seriously reduce the current deficits and projected debt. Because there is a big difference between today and the days of the Greenspan commission: the crisis is not upon us today.

    In 1983 the political heads, Ron and Tip, had to face pain via either SS running out of money or by raising taxes/cutting benefits. No way out. Since they had to, they used the commission well to deal with the issue rationally economically, and with least pain possible politically.

    But today the politicians still have plenty of options to punt the pain far down the road. They aren’t going to use either commission to minimize pain that they aren’t going to incur at all. So forget that, IMHO.

    That gets us to which would provide the best “second best benefit”: facing and clarifying issues, educating the public, mapping out future options to really deal with the debt when the time comes, full costs revealed.

    The best one for that? I don’t know … but my feeling is with Hennessey: Skeptical about Conrad– Gregg — but the Obama commission wouldn’t exist but for Conrad-Gregg, and does that say something?

    Moreover, the attacks on the Greenspan commission clearly undermine the support for ALL budget commissions efforts … and if they are coming from the “friends of the White House”, does that say something?

    As a final straw in the wind, Krugman has become quite a *dove* on the deficit … wanting to spend a whole lot more, lamenting the practical politics that prevents more spending, dismissing concerns about the national debt for decades to come.

    If he’s blowing one way on the deficit issue (apparently to the White House option) I’m thinking of blowing the other.

    But mainly I see this “Battle of the Commissions” as DC inside baseball, a pretty much classic fight between Congressional forces and the White House to control an issue agenda in an election year.

    I suspect there’s a lot of such stress between Congressional forces and the White House over controlling issue agendas at the moment, after recent events.

    One person’s opinion, FWIW

  3. comment number 3 by: Bruce Bartlett

    The problem is that these commissions aren’t costless. At a minimum they waste time. From the time a commission is created until it finishes there will be no action whatsoever on the deficit because everyone will be waiting for it to finish its work, and even deficit reductions that are doable will be on hold. I think the best course of action is to use the budget resolution that Congress has to do anyway in the next two months to lay out a plan, let the budget committees draft the details, do the whole thing through reconciliation, and then act upon it.

  4. comment number 4 by: Landru

    I believe Dean Baker has already covered this correctly:

    http://tpmcafe.talkingpointsmemo.com/2009/12/01/commission_is_washingtonspeak_for_cutting_social_s/

    Since the last great Social Security reform in the 1980’s, which raised payroll taxes to pre-fund the retirement fund, it has been clear that that money would have to come out of future general income taxes (plus interest). This means that it has been clear for at least 25 years that taxes on richer people would have to go up when the SSTF fell out of surplus, which is on the order of now+5 years. With this date looming, _all_ discussions of “Social Security reform” or “entitlement reform” or “fiscal reform” that I have seen have been aimed at _avoiding_ this outcome, ie avoiding raising income taxes on rich people. All of this talk about commissions, etc. is just a disguise, to obfuscate what is basically blatant theft: poorer people paid into the SSTF, subsidizing the Treasury for 25 years and allowing it to lower taxes for richer people; richer people should now pay that money back but don’t want to.

    _Any_ discussion of “fiscal reform” that does not agree _in advance_ that the SSTF’s obligations should be repaid, in full and on schedule, from general revenues is a sham, pure and simple.

  5. comment number 5 by: Brooks

    Bruce,

    Re: At a minimum they waste time. From the time a commission is created until it finishes there will be no action whatsoever on the deficit because everyone will be waiting for it to finish its work, and even deficit reductions that are doable will be on hold.

    Tell me, please, what kind of progress toward fiscal responsibility you think would be likely to occur this year in the absence of a commission that would be much less likely to occur if there were a commission?

    Re: I think the best course of action is to use the budget resolution that Congress has to do anyway in the next two months to lay out a plan, let the budget committees draft the details, do the whole thing through reconciliation, and then act upon it.

    You mean basically that it would be ideal if Congress suddenly did the right thing without the political cover of a commission even though the reason they haven’t done so is because it would be too politically costly?

  6. comment number 6 by: Brooks

    Paul Krugman apparently can’t decide between the “it would only lead to awful cuts in social spending” argument against a commission and the “it won’t have any effect” argument http://krugman.blogs.nytimes.com/2010/01/20/errors-of-commission/

    Come on, Paul, at least make up your mind.

  7. comment number 7 by: B Davis

    Bruce Bartlett wrote:

    The problem is that these commissions aren’t costless. At a minimum they waste time. From the time a commission is created until it finishes there will be no action whatsoever on the deficit because everyone will be waiting for it to finish its work, and even deficit reductions that are doable will be on hold. I think the best course of action is to use the budget resolution that Congress has to do anyway in the next two months to lay out a plan, let the budget committees draft the details, do the whole thing through reconciliation, and then act upon it.

    I agree that these commissions are not costless. Also, I believe that it was Cokie Roberts who pointed out on today’s “This Week” that the only successful commissions have been the base-closing commission and the 1983 Social Security Commission. The latter success was likely largely due to the fact that Social Security faced an immediate financing crisis. As I mention in this comment, I think we would do well to do everything we can to remove unnecessary pressure from our politicians to help enable them to make the tough decisions. After all, many of the suggestions from past commissions have simply been shelved by those same politicians. An additional possibility would be to have some sort of permanent bipartisan group that would put out yearly reports and updated suggestions. But I agree that commissions have the disadvantage of often wasting time by giving politicians an excuse for doing nothing while they are in session.

  8. comment number 8 by: SteveinCH

    The issue thought is the counterfactual. In the absence of a commission, what probability do you assign to the normal processes of Congress producing a positive outcome on our short- or long-term budget situation.

    I can’t write out mathematical notation; but, in the absence of a real financial crisis (e.g., China stops buying our debt or Moody’s or S&P drop the government’s rating), I’d say it’s the limit of X as X approaches zero.

    Given that, a commission at least offers the possibility of a set of recommendations that are internally consistent to arrive at a goal. There is some question about what the goal should be and I find it somewhat frightening that the goal coming from the administration is a 3% deficit.

    I guess if some believe the probability of Congress acting, in an election year, to make major and somewhat painful changes is greater than zero, you could argue that delay is a real cost. Since I don’t believe so, I see it much like Brooks does. A commission is, at least now, more or less a zero cost option.

  9. comment number 9 by: Brooks

    Stan Collender of CG&G criticizes Diane’s post and references and applauds Brad DeLong’s criticism of it as well http://capitalgainsandgames.com/blog/stan-collender/1432/brad-delong-gets-it-when-it-comes-commission#comment-5406

    First, I can’t help but comment on the comical, but sad dynamic of one guy (Stan) — who apparently began the practice of blocking comments with arguments that challenged/refuted his arguments — approvingly referencing another guy who is notorious for that practice (Brad DeLong). I’ve had my own experience with my comments (relevant and civil) first appearing on DeLong’s blog, then being deleted by DeLong. But I also Googled keywords — “brad delong” “delete” “comments” — and immediately got links to numerous commenters elsewhere saying that he had repeatedly deleted their comments on an apparently ideological/partisan basis. For example, one link was to a thread on Marginal Revolution (I’m just guessing most commenters were libertarian and expressed libertarian arguments on his blog). See comments starting at Feb 10, 2009 5:05:19 PM http://www.marginalrevolution.com/marginalrevolution/2009/02/the-geithner-plan.html

    Now on to the issue at hand.

    Stan’s argument apparently comes down to two assertions regarding the political calculus (particularly impact on chances of re-election) of fiscal responsibility, that calculus being the net effect of the political benefit of fiscal responsibility vs. the political cost of supporting particular tax increases and particular reductions in projected spending:

    (1) The public doesn’t care nearly enough about fiscal responsibility for it to be a net positive for members of Congress and the president to support particular tax increases and particular reductions in projected spending,even with the political cover and P.R. (increased attention to the issue) generated by a commission, and therefore there is no plausible way anything positive will result from a commission.

    (2) If we don’t let those politicians use a different kind of political cover — that of supporting the commission to associate themselves with fiscal responsibility without actually supporting action — the public is likely to “throw the bums” out in favor of candidates who support particular tax increases and particular reductions in projected spending. Thus, discarding the commission idea is the best way to get us to fiscal responsibility because those “bums” will be replaced by straight-talking, fiscally responsible candidates.

    Anyone see a contradiction between Assertion #1 and Assertion #2?

    And as a note, I’ve explained several times on CG&G how a commission could provide benefits far exceeding its costs (explicit and opportunity costs) even if it doesn’t produce a recommendation that is enacted and that moves us a long way toward fiscal responsibility. I won’t repeat it all here, but in short, it’s an ongoing, multi-year P.R. battle. It’s chess, not checkers.

  10. comment number 10 by: Brooks

    As a note re: my link in comment above, on Marginal Revolution the date is below the comment, so look above the “Feb 10, 2009 5:05:19 PM” for the comment that started the flood of others saying that they, too, had experienced DeLong’s censorship.

  11. comment number 11 by: AMTbuff

    In my dream world, I would like one party to run on a national platform of cutting promised benefits: primarily Medicare, Medicaid, and Social Security. That party would lose the election, but it would be positioned perfectly to win the first election after the government bond market crashes.

    When the bond market bubble bursts, all government benefits will be cut drastically, far more than any proposals ever proposed before. The party that proposed modest cuts ahead of the crisis will appear prescient, responsible, and trustworthy.

    I guess I’m talking about a mythical third party, led by a mentally balanced version of Ross Perot.

  12. comment number 12 by: Brooks

    Steve,

    Glad to see your comment at CG&G http://capitalgainsandgames.com/blog/stan-collender/1432/brad-delong-gets-it-when-it-comes-commission#comment-5416 was posted. This morning I submitted there essentially the same comment I posted upthread here (my 1:58pm today), but, to my immense surprise (ahem), Stan apparently discarded it rather than posting. (A few of several comments I’ve submitted over the past week or so did get posted, perhaps by other contributors, since any of them can post from the submitted comment queue, or perhaps by Stan if the others started asking him about this matter per my requests and he wanted to get them to drop it).

  13. comment number 13 by: Brooks

    Steve,

    I should add that the comment I submitted at CG&G this morning did not contain my paragraph regarding Stan and DeLong blocking/deleting comments, only the challenge to his arguments.

  14. comment number 14 by: Brooks

    Oh, and as far as Stan and DeLong calling out members of Congress who are advocating a budget commission who also voted for Medicare Part D and the Bush tax cuts and who, in general, haven’t proposed specific large tax increases or large reductions in projected spending, what Stan and DeLong don’t seem to get (or want to pretend they don’t get) is that those members of Congress represent an argument for a commission, because they are essentially saying “We want very much to get to fiscal responsibility and we’re willing to compromise (vs. our political “side’s” ideological ideal), but even we can’t go out on a limb and support unpopular sacrifices and ideological compromises without the kind of political cover that a commission may be able to provide.”

  15. comment number 15 by: Jim Glass

    The Senate today rejected an effort to create a bipartisan commission to recommend ways to reduce the U.S. deficit … 53-46.

    President Obama, who had backed the plan, could still create a commission by executive order. [LA Times]

    OK, so now we’ll see if Obama really wanted his own commission, or if it was only a ploy to grab control of the budget agenda away from Congress.