The Wall Street Journal reports:
White House and congressional leaders reached a tentative deal aimed at establishing a bipartisan commission to tackle the soaring federal budget deficit, in what is likely to be a central element of President Barack Obama’s fiscal 2011 budget, people familiar with the talks said.
Meeting Tuesday night at the White House, Vice President Joe Biden, White House budget director Peter Orszag and Democratic leaders agreed the commission would report back at the end of 2010 with a path to bring this year’s projected $1.4 trillion deficit from about 10% of gross domestic product to 3% by 2015.
The commission would also submit recommendations on taxes and spending on entitlements, such as Medicare, Medicaid and Social Security. House and Senate Democratic leaders promised the recommendations would be submitted to Congress for an up-or-down vote after the midterm elections this year, these people said.
The 18-member commission will include six people appointed by congressional Democrats, six appointed by congressional Republicans and six appointed by the president. Of the president’s six, two will be Republicans and four will be Democrats.
Under the deal, the commission will be created by an executive order and laid out in the fiscal 2011 budget that Mr. Obama will submit to Congress Feb. 1.
Republican leaders weren’t part of the talks, and the panel can work only if GOP leaders select members to serve on it.
Let us assume this reporting is accurate. I will compare the rumored Administration proposal to the Conrad/Gregg legislative proposal, the Bipartisan Task Force for Responsible Fiscal Action Act. Senator Kent Conrad (D-ND) is Chairman of the Senate Budget Committee, and Senator Judd Gregg (R-NH) is the Ranking Republican Member of that committee.
I will highlight important differences in red.
Administration
Conrad-Gregg bill
President
Congress & President
Executive Order
new law
short-term
long-term
reduce deficit to 3% by 2015
significantly improve the long-term fiscal imbalance
taxes & entitlements
taxes & spending
18
18
?? SecTreas + 1 other Admin.
current Members of Congress, SecTreas + 1 other Admin.
12 appointed by D's, 6 by R's
10 appointed by D's, 8 by R's
?
bipartisan co-chairs
?
chosen jointly by co-chairs
14 of 18 to make recommendations
14 of 18 to make recommendations
In 2010 after Election Day
Nov. 15, 2010
None. Political commitment by Pelosi & Reid to have an up-or-down vote, but no rule changes mean they can't bind Congress to that. Majority vote and 60 Senate votes needed to pass a law.
limits Congressional rules to mandate up-or-down House & Senate votes by Dec. 23rd. 3/5 of House & Senate required to pass.
In my experience, there are four reasons to create a commission:
The Conrad-Gregg task force bill is trying to delegate control to change the law. The rumored Administration proposal is trying to provide an excuse while they duck a hard policy issue in an election year.
A commission that is trying to actually make changes to law must be credibly balanced and it must have formal authority to bind policymakers. The Conrad-Gregg proposal has both. The rumored Administration proposal has neither.
I am torn on whether to support the Conrad-Gregg proposal. I instinctively don't like it. I fear that this structure would lead to huge tax increases. I lean against Congress delegating their authority, and generally abide by the maxim that "the problem isn't the process, the problem is the problem." But I do feel comfortable saying that Conrad-Gregg is an intellectually honest and credible commission proposal, albeit one that might lead to a policy outcome that I would hate. If you are going to create a commission like this, then this is the most balanced proposal I have seen so far.
In contrast, the rumored Administration proposal is not credible.
The President's commission does have a political advantage. If the press treats it as credible, he may get away with substituting it for real short-term policy proposals in his budget, and with completely ducking the even more important long-run fiscal policy debate. I am just guessing here, but if the upcoming President's budget contains a large amount of deficit reduction and labels it "deficit reduction from bipartisan commission recommendations," then we will have confirmed the commission's true purpose. Look for the magic asterisk in the budget proposal.
The press should also ask the Administration if the commission's mandate would allow it to recommend repealing all or part of (1) the stimulus, and (2) a potential new health care law. Whether or not the commission proposes such changes, are they allowable within the commission's mandate?
Yes, CBO scores the health care bill as deficit neutral (with huge caveats), but enactment of that law would make future deficit reduction efforts much harder because the bill would use some of the easiest and biggest Medicare savings proposals to offset new government spending. If the Administration's answer is, "No, the commission can propose changes to everything except the spending and tax changes we have implemented over the past year," then it reinforces the true nature of this proposal.
If you're concerned about the deficit, the place to start is by not creating a new trillion dollar entitlement program.
(photo credit: PSU punts by acaben)
I would find both proposals a little more honest if the reporting dates were October 15, and the Congressional votes were next January.
A 3/5 vote is required to pass the Conrad-Gregg bill to create the commission (and the process), or to pass the proposals of the commission? I would be happier if a supermajority were required to pass the proposals. Reply – Quote Tim Curlee Reply 20 January at 9:58 pm
I am sick to death of commissions and prefer we never see one again. First, we elect people to office because we think they have the judgment, wisdom and ideas to tackle problems. It's bad enough too many decision are passed on to Secretaries and Under-Secretaries to make decisions. To further outsource their responsibility to another unnecessary layer of bureaucracy for solutions, usually the most important matters that should be handled more than any by elected officials, is ridiculous.
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