National debt: Will anyone buy Obama panel's bold plan?
Erskine Bowles and Alan Simpson, who chair Obama's commission on reducing the national debt, delay a key vote. It's an indication how elusive consensus will be on cutting the deficit.
The co-chairmen of President Obama's fiscal commission have agreed to a bold plan to slash federal deficits and put America's fiscal house in order. The problem is they're not sure if the rest of the bipartisan commission – let alone Congress – will sign on.
Erskine Bowles and Alan Simpson said Tuesday that a final set of recommendations is ready for the full commission to review. They said the deadline for a vote by the 18-member body is shifting to Friday, rather than Wednesday, however, to give members time to review the proposal.
"We'll get somewhere between two and 14 votes," said Mr. Bowles, a former chief of staff to President Bill Clinton. Two is a reference to himself and Mr. Simpson, a former Republican senator from Wyoming. Fourteen refers to the number of commission members who must approve the package of spending cuts and tax reforms in order to formally issue a final report to the president.
Ahead of the delayed vote, Bowles also sought to frame the panel's work as a success whatever the outcome.
"I think we've won, and we've won big," he said. "The era of deficit denial in Washington is over."
It is true that fiscal reform ranks as a rising voter priority. At the same time, however, the difficulties of winning agreement among the panel's bipartisan members signal how hard it will be to build consensus among US voters for significant fiscal reforms.
To the co-chairs' credit, they have managed to garner significant media attention for a package of proposals that would eliminate tax-code perks, raise the eligibility age for Social Security, and slash ordinary federal spending – reducing federal deficits by some $3.8 trillion over the course of a decade. Commission members are being asked to vote on what Bowles and Simpson said is a modified version of the package they made public early in November.
Bowles said he does not expect any last-minute dealmaking across party lines, but were a bipartisan deal to emerge that would win broader commission support, "we'd be crazy not to" reshape the proposals.
Simpson said the panel's work, which included examining fiscal scenarios in detail, leaves no doubt that rising public debt must be a national priority.
"America, you have a serious problem," Simpson said. "Time is short."
Mr. Obama essentially has agreed, asking the panel to find ways to bring the federal budget into balance, excluding interest on public debt, by 2015. That would put the US roughly on course to stabilize public debt as a percentage of the nation's gross domestic product (GDP).
The success of the tea party movement in the November elections, propelling a new crowd of fiscal hawks into Congress next year, has amplified the prominence of deficit reduction on the nation's to-do list. The ongoing turmoil over public-debt burdens in Europe, meanwhile, is providing a current case study of the potential risks if the nation's debt rises unchecked.
Even so, it's not clear if momentum will build for far-reaching deficit reduction this year or next. A big-impact plan would likely have to include spending cuts and tax-revenue increases that are not easy for elected officials in either party to embrace.
Tax hikes, in particular, are a voter sore spot. With that in mind, Bowles and Simpson were careful in their initial proposals to emphasize keeping tax rates low. Some of their proposals would actually cut personal and business tax rates, while raising overall tax revenue by scaling back credits and deductions.