Can Obama's debt commission overcome Congress' politics?

McClatchy NewspapersFebruary 17, 2010 

WASHINGTON — Will President Barack Obama's new debt-reduction commission be able to spur a reluctant Congress to make tough but necessary choices on Social Security, Medicare and tax increases?

Most experts weren't optimistic Wednesday.

"The chances of success are extremely slim. The political situation makes it extremely difficult," said James Horney, the director of federal fiscal policy at the Center on Budget and Policy Priorities, a center-left research group.

The projected government debt is staggering. The federal budget deficit is expected to reach $1.56 trillion this fiscal year and $1.27 trillion next year.

The national debt — accumulated deficits — is expected to hit $9.3 trillion this year, or 63.6 percent of the gross domestic product, the measure of all the nation's goods and services produced annually. By 2015, the debt will total almost $14 trillion and equal 72.9 percent of the GDP, the highest level since 1950, when World War II debt was still being repaid.

This exploding debt menaces growth and U.S. living standards.

Obama is expected to sign an executive order Thursday creating a bipartisan panel that's charged with finding ways to shrink the debt. It's expected to examine how to help Medicare avoid insolvency — projected in seven years — and to keep Social Security financially sound as baby boomers retire.

For decades, analysts have called for a combination of phased-in spending cuts and higher taxes to fix both programs. The obstacle has been political: The public doesn't want the spending cut or taxes raised, so politicians do neither.

That's the Catch-22 overshadowing Obama's commission, experts said Wednesday: To matter, its recommendations must win support from both political parties and, ultimately, Congress.

Some early signs aren't hopeful.

John Boehner of Ohio, the leader of Republicans in the House of Representatives, has dismissed the commission idea as "nothing more than a partisan Washington exercise rigged to impose massive tax increases and pass the buck on the tough choices we need to be making right now."

Douglas Holtz-Eakin, economic adviser to Arizona Republican Sen. John McCain's 2008 presidential campaign, said: "The problem is when you put the administration in the process, it's no longer bipartisan."

Brian Riedl, a senior federal budget analyst at the Heritage Foundation, a conservative policy-research center, said there was no guarantee that Congress ever would vote on the commission's work or even that the panel would be transparent.

The White House has announced that it will appoint Erskine Bowles, chief of staff under President Bill Clinton, and former Wyoming Sen. Alan Simpson, a Republican, as commission co-chairs. Both were key players in successful 1990s efforts to negotiate bipartisan deficit-reduction packages, and the Clinton years ended with four straight years of budget surpluses.

Back then, however, Republicans controlled Congress from 1995 to 2001 while Democrat Clinton held the presidency, making bipartisan deal-making more necessary. Today Republicans aren't responsible for either branch of government, and they aren't inclined to compromise, especially now that they expect big gains in November's elections.

Still, not everyone was gloomy about the commission's chances.

Senate Budget Committee Chairman Kent Conrad, D-N.D., said that while the Obama commission wouldn't be able to force a congressional vote, "it's as close to a statutory commission as one can get," and Democratic leaders have said they intend to vote on its plan. "The best shot we have is a package with an up-or-down vote," Conrad said.

One way to get the commission's recommendations considered seriously would be for Obama to include them in his fiscal 2012 budget next February.

"That would be the logical way to do this," said Susan Tanaka of the Peter G. Peterson Foundation, a nonpartisan economic-policy organization that's been promoting the commission idea. "Nothing could force Congress to act on the recommendations, and they would not be filibuster-proof in the Senate, but who knows?"

Another Washington veteran was even more optimistic.

"I'm really hopeful. I wouldn't have said that two years ago, but the long-run problem today is closer than it used to be," said Alice Rivlin, a former Federal Reserve Board vice chairman who's the co-chair of the Bipartisan Policy Center's Debt Reduction Task Force.

"What's changed today is that the last couple of years, the level of debt has risen so dramatically that we're close to not being able to finance additional debt," she said.

Rivlin said that a commission would help educate the public about the debt crisis, and that politicians would come around.

"The public is listening, and the government will respond," she said.

At least, Holtz-Eakin said, the commission would try.

"This is Congress' job and they should do it, and the White House should provide leadership," he said. "Neither is doing it, so let's try something different."

ON THE WEB

Conrad-Gregg commission

Alice Rivlin testimony on debt crisis

Overview of president's 2011 budget

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