Wait for a Better Deficit Report

Jonathan Chait has modified his applause for the deficit-reduction plan released by Alan Simpson and Erskine Bowles to make an exception for its cavalier treatment of domestic discretionary spending, which he calls the “gaping flaw” in the two men’s report. (Let’s not attribute it to the president's fiscal commission, whose members had little to do with it.) The rest of the report, its treatment of taxes, health and defense spending, Chait says, is “a coherent and useful contribution to the deficit problem.”

But it isn’t. I’m not one to dismiss the deficit commission – almost a year ago, I wrote an article called “Don’t Fear the Fiscal Reapers,” and I think a serious commission could help to overcome the political barriers to a reasonable fiscal path. But this draft isn’t it, not because there are things in it I disagree with but because it is so reckless and sloppy, in a way that is damaging to the objective. No part of it is much more coherent than the domestic discretionary section. On health care, it assumes cost controls (the very thing that in the mildest form almost sunk the Obama plan) and proposes that the president be required to submit plans to achieve an unrealistic level of health cost inflation. On taxes, for no reason related to the deficit, it proposes a reduction in the top rate to a level lower than it's been since 1916, paid for by elimination of deductions and credits that overwhelmingly benefit people who don’t pay that top rate. I’m all for classic tax reform – lowering rates and broadening the base of income it's collected on – but if the goal is deficit reduction, why should the top rate be five points lower than after the 1987 tax reform?

That it’s a sloppy mess should be little surprise. This is what happens with commissions like this, made up of people who haven’t dealt with the federal budget seriously in over a decade (Simpson’s been out of office for 14 years, and Bowles blew two attempts to get there), have never dealt with it (like the two CEOs on the commission), or are busy serving or getting re-elected to Congress. (Or not, in the case of Rep. John Spratt.) They drift in for the commission's five meetings, wander out, say what they always say, have no shared objective, and none of them give the project more than 5 percent of their attention. (You can watch them talking past each other, if you have the patience, here.)

With the thing going nowhere, Simpson and Bowles seem to have simply grabbed whatever they had on the table and declared it a plan, hoping it would get the others engaged. Instead, it seems to have made the whole project irrelevant.

That’s why I’m more interested in the deficit-reduction report that is due this Wednesday from the task force assembled by the Bipartisan Policy Center's task force, chaired by former OMB Director Alice Rivlin and former Sen. Pete Domenici. And there’s a set of people in Washington, mostly not elected officials, who understand the federal budget inside out, who (I think) wouldn’t produce the kind of amateurish product that is Simpson-Bowles. That set of people includes Len Burman of the Urban Institute, Joe Minarik of the Committee for Economic Development,  Sheila Burke of the Kennedy School, former CBO head Don Marron, and Rivlin of course. Together they have probably a century of hands-on work with budget questions, and all are members of the Bipartisan Policy Center task force. And all, I’m guessing, are fully engaged.

I have no idea what will be in that report, and along with other progressives, I’m sure I’ll hate a lot of it. But I’m betting it will be a lot more deserving of Chait’s honorific, “coherent and useful,” than this week’s entry.

-- Mark Schmitt

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