Can Obama's deficit commission work, as partisanship rages?
Obama created a deficit commission Thursday that includes both Democrats and Republicans. But the move comes during an election year rife with mistrust and political maneuvering.
President Obama created a commission on Thursday designed to fix America's fiscal mess. The question is, can that mess be fixed without first bridging the yawning political gap that divides Democrats and Republicans in Washington?
A troubling sign is visible from the get-go: The president had to set up the commission on his own, naming a Republican and a Democrat to lead it, because a bipartisan measure in the Senate a few weeks ago failed to muster the needed votes.
Mr. Obama said that fast-rising federal debt is forcing Washington to confront the issue and that a bipartisan commission is the best hope for doing this. Many outside experts agree with this assessment, but Obama's move comes during an election year rife with mistrust and maneuvering across the congressional aisle.
"I hope congressional leaders in both parties can step away from partisan bickering and join ... this effort," Obama said.
He named Alan Simpson, a former Republican senator from Wyoming, and Erskine Bowles, who served President Clinton as White House chief of staff, to chair the commission. The 18-member panel would have eight Republicans and 10 Democrats. Obama is asking Republican leaders in the House and Senate to name six members and their Democratic counterparts to name six. Obama would name four more, including one more non-Democrat.
Obama called for at least 14 panel members to agree on their recommendations, so any resulting proposal "has to be bipartisan in nature," he said.
Messrs. Simpson and Bowles are well-known and respected figures in Washington, and both were involved in previous successful bipartisan deficit-reduction deals.
But as America has entered a new century, the fiscal problem has grown more daunting economically and more challenging politically.
Two wars, large tax cuts, and expanded entitlements expanded the federal red ink early in the Bush presidency. Then a financial crisis and recession sapped tax revenues even as emergency federal spending to revive the economy soared – punctuated by Obama's $787 billion Recovery Act. The result: The national debt is rising fast toward what economists see as a danger zone.
Although the United States so far doesn’t face a Greece-style debt crisis, America runs the risk of slower economic growth until fiscal stability is restored. The longer a fix is delayed, the more costly it will be and the greater the chance that foreign lenders will grow wary of Treasury bonds.
Obama's recent budget proposal calls for budget deficits to decline as the economy recovers, but not enough to stabilize the national debt. Obama's $1 trillion projected deficit in 2020 would be 4.2 percent of US gross domestic product (GDP). Thus annual borrowing would be rising faster than the growth of the overall economy. (White House economists recently gauged the trend line of GDP growth at about 2.5 percent a year.)
Politically, partisan standoffs have become the norm, even on many matters that are easier for lawmakers to address. Taming deficits is an issue where the fixes aren't traditionally popular with voters: probable tax hikes and mechanisms that restrain the growth of entitlement benefits.
Sen. Judd Gregg (R) of New Hampshire, a co-sponsor of the recent congressional effort to create a bipartisan fiscal commission, says that lawmakers need a procedural nudge to take such a vote. His proposal required Congress to vote on the commission's proposal – something Obama can't mandate with his executive order.
"Unless you have fast-track approval, unless you have an up-and-down vote, unless you have no amendments ... you don't get bipartisanship, you don't get fairness, and you don't get action," Senator Gregg said in January.
The measure failed as several of Gregg's fellow Republicans withdrew their support for the idea.
Follow us on Twitter.