Third Way Perspectives
Posts Tagged ‘deficit’
October 27th, 2011
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.
October 13th, 2011
This piece was originally posted by Kaiser Health News.
To succeed, the so-called ‘super committee’ will need all of its super powers, and then some. To get a deal on reducing the deficit, it must leap across the chasm between the GOP stance of spending-cuts only and Democrats’ insistence that revenue must be part of any deal in a single bound. And, to get it done by Thanksgiving, it will have to move faster than a speeding bullet. However, one issue that’s typically kryptonite in budget talks may provide the committee with a chance to save the day.
The rising cost of health care is squeezing the federal budget, making it a common enemy. For Republicans, spiraling costs have placed them in the increasingly untenable position of proposing steep Medicare cuts in order to avoid tax increases in their budget proposals. Democrats are looking at a budget where health care spending crowds out other progressive priorities such as education, housing and public investments in general. Read the rest of this entry »
January 27th, 2011
“This is our generation’s Sputnik moment,” President Obama declared in his State of the Union speech Tuesday evening. Interesting metaphor. I was around for the launching of Sputnik in 1957. He wasn’t. Sputnik created a huge wave of shock and paranoia in the United States. The Soviets were beating us! We were losing the Space Race! And maybe the Cold War.