Third Way Perspectives

Subscribe via RSS

Author Archive

A Formula for Super Committee Success

October 27th, 2011

by and

This piece was originally published by Politico.

With less than a month before the supercommittee’s deadline, pressure is again building for a grand bargain. President Barack Obama submitted a large plan; House Speaker John Boehner is urging the supercommittee to take up tax reform and various bipartisan coalitions are calling for trillions in deficit reduction.

A $4 trillion grand bargain would be ideal — but we’ve seen this movie before. Here’s how it ends: The clock runs out; a major deal isn’t done; the blame game starts; financial markets dip; and voters lose even more confidence in government. Maybe it’s time to write a new scenario.

So here’s a plan that could snatch victory from the jaws of defeat. It’s a no-gimmicks, bipartisan, 67-line item proposal that can achieve what the supercommittee was statutorily designed to do: come up with $1.2 trillion in deficit reduction.

Think of it as sort of an emergency blueprint for the committee to keep under glass — until it becomes clear that a grand bargain is unachievable.

First, take a big-tent, bipartisan approach that brings together ideas from across the ideological spectrum. It can include items from Obama’s proposal; Sen. Tom Coburn’s Back in Black plan, a $9 trillion deficit-reduction plan with spending cuts and revenue raisers; the National Commission on Fiscal Responsibility and Reform report and proposals from outside, nonpartisan groups. This provides a common foundation for compromise.

Second, allow each side to remain faithful to its core principles — but don’t require them to cross a policy or political Rubicon. The last attempt to reach a grand bargain was ultimately felled as a result of Republicans’ ironclad allegiance to tea party activists and Grover Norquist’s no-tax pledge.

Democrats contributed to the collapse through their resistance to sweeping entitlement reform.

Our plan doesn’t ask either side to cross their major lines in the sand — rather it postpones that grand bargain until after the 2012 election. How? We don’t touch top tax rates, capital gains or make an example of millionaires and billionaires. But we do raise real revenue by scotching tax earmarks for things like timber industry tree planting and NASCAR race tracks and by restraining some tax deductions.

On entitlements, we guard the structure of programs like Medicare and Social Security but generate savings by making small changes in the way they do business.

Third, the plan includes roughly one-third revenue hikes, one-third defense and one-third mandatory cuts — so all parts of government would take their fair share. This also would include enough savings to pay for the president’s jobs proposal — or whatever common-ground package ultimately emerges from Congress. So we’re not just cutting the deficit but helping drive short-term growth.

Finally, our plan is not a political game-changer — by design. Republicans would still be able to claim that they’ve fought the Washington urge to raise taxes, and Democrats would remain dug in as the protectors of programs like Medicare and Social Security. And an agreement of this size would be a victory for the president — but not a large enough triumph to alter the 2012 landscape, which is clearly one of the calculations that Republicans are making.

We’d love to see the supercommittee come together and solve our long-term, structural budget crisis. But bridging a hardened partisan divide in just a month is a bit much to ask any committee — no matter how super.

Committee members and the leadership of both parties must be clear: Failure has consequences, and sequestration should not be the fallback. At a time of unprecedented economic instability and public distrust in government, we can’t afford another display of Washington dysfunction.

The committee needs a real fail-safe contingency plan ready.

Selling U.S.-Korea Trade Deal Calls for Common Sense

May 11th, 2011

by and

This piece was originally published by Bloomberg.

Stop us if you’ve heard this one before: The proposed U.S. trade deal with South Korea would “increase exports of American goods by $10 billion to $11 billion.”

This is how Washington policy makers and American business leaders have traditionally made the case for new U.S. trade agreements. The numbers don’t lie; they don’t always persuade, either.

Read the rest of this entry »

A Message That Actually Works — Until It’s Scrambled

September 23rd, 2010

by

This piece was originally posted on The Huffington Post.

In “A Message That Actually Works,” Mike Lux laments efforts by Democrats to frame the upcoming election as a choice between going back to the Bush economic plan or moving forward with President Obama’s. He used the poor performance of what he referred to as a “Third Way-style” message in a recent Democracy Corps poll as evidence that the approach is a dud. With all due respect to Mr. Lux, calling the polled message “Third Way-style” is like calling a soufflé an omelet because they both contain eggs. Even though there’s a common ingredient, different combinations produce wildly different dishes. We think ours is the winning recipe.

Read the rest of this entry »

Congress Should Extend a Helping Hand to Homeowners

February 12th, 2010

by and

This piece was originally published in Roll Call.

The past two years dealt a punishing blow to the personal wealth of millions of middle-class homeowners. Amid rising foreclosures and plummeting home values, Americans lost more than $4 trillion in home equity. Ten million American households — or more than 1 in 5 homeowners — are currently “under water,” owing more on their mortgages than what their homes are worth. Millions more have lost the equity they were counting on to send their kids to college, save for retirement or to have as a nest egg for emergencies.

Read the rest of this entry »