Opinion

Felix Salmon

The fiscal commission’s failure

By Felix Salmon
December 3, 2010

I’m fascinated by the various headlines reporting the deficit commission’s 11-7 vote.

Some treat the plan as some kind of independent entity which was lobbying for votes: the WSJ runs with “Deficit Plan Fails to Win Panel Support,” while Reuters plumps for “Deficit-cut plan falls short, offers framework” and Fox News has “Deficit Commission Report Fails to Advance to Congress.” The Washington Post goes long: “Deficit plan wins 11 of 18 votes; more than expected, but not enough to force action.”

Other headlines concentrate on the panel as the key actors, and the range of views here is very wide. Bloomberg says bluntly that “Debt Panel Rejects $3.8 Trillion Budget-Cutting Plan,” in line with the FT’s “Panel reject US budget deficit plan”. Politico is a bit softer — “Debt panel falls short on votes” — while NPR is positively upbeat: “Majority Of Deficit Commission Endorses Plan; Not Enough To Make It Automatic.” Ezra, too, looks on the bright side, plumping for “The fiscal commission succeeded — sort of.”

My feeling here is that the second group is probably better than the first: the news here should properly focus on the deficit commission and what it has failed or succeeded in doing. It was the commission which was charged with putting a bipartisan plan together, it was the commission which faced the very high hurdle of getting 14 votes (a 78% supermajority), and it was the commission which ultimately didn’t manage to get there.

Interestingly, there was one particular caucus within the commission which was responsible for its failure: the members of the House. There were six of them altogether, three Republicans and three Democrats, and five of the six voted no; those five votes alone were enough to veto the plan.

There’s a certain irony there, in that it’s the House which just passed the fiscally responsible version of extending the Bush tax cuts, and it’s the Senate which seems to want to pass the much less responsible version with lots of extra tax cuts for the rich. It seems that senators love to clothe themselves in the garb of fiscal statesmen when it doesn’t matter, but balk at such ideas when they actually come up for a vote; the House, meanwhile, works the other way around. Needless to say, none of this bodes well for getting anything substantive through Congress in the foreseeable future.

Comments
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The problem is contained in the word “bipartisan.”

The US has two competing camps. One believes tax cuts always pay for themselves. The other doesn’t.

One believes the ‘government that governs best governs least.’ The other believes in full employment and robust governance.

The eventual resolution won’t come from bi-partisan compromise. It will come from programs that benefit the non wealthy in America. The wealthy will continue to afford first class airplane seats, the remainder will get the best seats military transport can provide.

Posted by Beezer | Report as abusive
 

“There’s a certain irony there, in that it’s the House which just passed the fiscally responsible version of extending the Bush tax cuts”

are you nuts? the bill the house passed costs about $3.2 trillion, and it is entirely deficit financed. There is no way to use the works fiscally responsible and that bill in the same sentence.

Posted by dan.nelson | Report as abusive
 

Dan Nelson is absolutely correct. The “middle class tax cuts” are far more expensive than the “tax cuts for the wealthy”. None of them are fiscally responsible.

Posted by TFF | Report as abusive
 

You all presume that the Commission was meant to produce a plan that could be implemented. But this thing was shot down by a coalition that included Paul Ryan and Andy Stern. It was SUPPORTED (and I would bet dollars to doughnuts, only because it was going down in flames) by pols who would NEVER vote for it, like Dick Durbin.

And all the while, Obama was missing (turns out, posing in front of combat troops in Afghanistan, where all down on their luck prezes go for a pick me up).

This was a carefully stage managed play: see, we all care about the deficit, but we’re not QUITE ready to tackle it yet. For whom? Our creditors? Domestic critics? Bond markets? Your guess is as good as mine.

Posted by LadyGodiva | Report as abusive
 

Hey Salmon, of the Senators on the panel, 5 of the 6 voted YES to the plan. OOPS!

Posted by CDN_finance | Report as abusive
 

Oops, you said 5 of 6 house members dumped on it… my mistake

Posted by CDN_finance | Report as abusive
 

The deficit commission is a farce like all things in government.

They nibbled at the edges of “defense”, even though DoD alone comprises 40% of discretionary spending and 7% of GDP (if you add in all things “defense”).

Their “solution” to medicare was to cap increases at 1%/year without saying how they’d accomplish this. The US spends 17% of GDP, double of almost every other industrialized country. Surely there is a huge amount of profiteering and waste.

Cur excessive defense and healthcare spendin to OECD averages. Tax capital gains as ordinary income. Problem solved.

A complete joke. Obama is Herbert Hoover and Con-gress is like 535 incarnations of the three stooges.

Posted by upstater | Report as abusive
 

Felix,
Over at nationaljournal.com, I posted a much more supportive assessment of what the Simpson-Bowles deficit panel achieved. Here’s the link: http://preview.nstein.prod/economy/for-d eficit-panel-the-vote-is-least-of-concer ns-20101203

Short version: the fixation on 14 votes is shallow and silly. Regardless of the number, Congress is free to do whatever it wants with the proposal.

What matters is the likely influence on Congress. And when you get the GOP senators like Coburn and Crapo signing their names to a plan that raises taxes, and a powerful Democratic liberal like Dick Durbin signing on to cuts in Social Security, that’s a big deal.
I am as disgusted and cynical about Washington as anybody else, and I agree that House lawmakers on the panel were a downer.

But something good and important happened yesterday. Simpson, Bowles & Co. put cracks in the marble temples of party purity, and I will bet money those cracks get bigger.

Posted by Elandrews | Report as abusive
 

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