Ripon Forum


Vol. 45, No. 4

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In this Edition

With the 2012 general election less than a year away, it’s probably safe to say that the current crop of GOP presidential candidates has not exactly set the world on fire. 

Debt Reduction Done Right

With the debt at historic levels, this respected budget expert argues that what the country needs is a bold and balanced plan to curb spending and get the economy back on track.

The Rise of the Supercommittee and the Repercussions of Inaction

This former Staff Director of the Senate Budget Committee predicts the deficit supercommittee will reach agreement on a plan to reduce the debt. Unfortunately, he argues, it won’t do much good.

California Dreamin’

After a bipartisan gerrymander designed to protect incumbents was approved in 2001, voters passed a redistricting reform plan to shake things up. Will it work in 2011?

The Loneliest Airplane

Brad Todd discusses how a ride on Air Force One is usually high on the wish list for senatorial candidates. With the President’s plummeting poll numbers, that’s no longer the case.

The Forgotten Prize of 2012

Amid all the coverage of the presidential campaign, the Utah Senator explains why the GOP’s biggest victory next year may not be winning the White House, but the Senate.

Defending the House in a Volatile Year

With House Republicans looking to hold and build their majority on Capitol Hill, this pollster looks at the factors that will both help and hinder their ability to achieve that goal.

Republicans Aim for a Southern Statehouse Sweep

Twenty years ago, Republicans did not control a single Southern legislative chamber. As this veteran newsman points out, they now hold majorities in over three-quarters of them.

Ripon Profile of Bill Haslam

Bill Haslam discusses his priorities as Governor of the Volunteer State.

The Rise of the Supercommittee and the Repercussions of Inaction

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The machinations of the Joint Select Committee on Deficit Reduction (the so-called “supercommittee”) have seemingly mystified the media.

While not hermetically sealed, the transactions of the 12 JSC members have been very difficult to chronicle accurately. It might be useful, then, to take a step back and look at the JSC, its formation, and the preferences of the two parties.

Remember how we got here. A certain kind of insanity spread through the Congress in early summer. Many Republicans said that they wouldn’t vote for an increase in the federal debt ceiling under any circumstances. Many Democrats said they sure as heck weren’t going to bail the Republicans out by voting for an increase, either. It resembled something like a pre-school sandbox at recess.

Republicans then opted for the old “Balanced Budget Amendment to the Constitution” dodge. Democrats countered with “The-road-to-ruin-is-covered-with-the-bodies-of-old-folks-that-Republicans-have- killed” maneuver.

Remember how we got here. A certain kind of insanity spread through the Congress in early summer … It resembled something like a pre-school sandbox at recess.

Someone then noticed that the really and truly and not kidding deadline for passing an increase in the debt ceiling was in early August. In order to pass an increase, the Budget Control Act, which established the JSC among other provisions, emerged. It contained a provision for a Balanced Budget Amendment vote. It also contained $917 billion in spending cuts, over a decade, in discretionary, appropriated accounts, which comprises a small percentage of federal spending.

And, above all, it did not mention those two words which cannot be uttered (with apologies to J.K. Rowling) – taxes and Medicare.

What do the two party caucuses want? First, they individually want to be re-elected. Second, as a necessary corollary to the first point, they don’t want to unilaterally disarm before the 2012 elections. If fiscal sanity is a by-product of the two imperatives above, well, great. If not, well, maybe next Congress.

So, Democrats figure that they have this great cudgel called “Medicare,” and that they will be able to regain the House, defend the Senate, and keep the White House with this cudgel.

Republicans think they have this great bludgeon called “taxes,” and that they will defend their majority in the House, take over the Senate, and win the White House with this bludgeon.

All pretense of “negotiating a settlement” has long vanished from the Administration. The President merrily paints the Republicans as plutocrats, handmaidens of Wall Street, sycophants for Big Oil, and heartless millionaires. The real White House no longer occupies 1600 Pennsylvania Avenue. Rather, it is located in Chicago, where the re-election campaign is based.

The real White House no longer occupies 1600 Pennsylvania Avenue. Rather, it is located in Chicago, where the re-election campaign is based.

The result of the first 11 months of this year? Congress has a 9 percent approval rating. Roughly three-quarters of respondents to polls believe the nation is headed toward wreck and ruin. And international observers wonder if America’s governing class has simply become unhinged.

The federal budget solution is very clear and simple. That’s why it is hard. It is difficult to hedge and trim about what has to be done.

Fiscal sanity requires three things — economic growth, fundamental reform of entitlements, and a pro-growth reform of the tax code that yields increased revenues.

The Bipartisan Policy Center’s Debt Reduction Task Force (the so-called Domenici-Rivlin group) has produced such a plan. So, too, did the Simpson-Bowles Presidential Commission. Other organizations have also produced well-thought-out blueprints. Realistically, although it certainly has the power to do so, the JSC is very unlikely to take steps to implement any of these fiscal plans. In all likelihood, the JSC will come up with the mandated $1.2 trillion in deficit reduction and pass the mess on to the House and Senate for final passage. Much of the deficit reduction may be real, some phony, and some concocted by baseline adjustments.

None of it, just like that $917 billion in cuts contained in the BCA, will change the debt trajectory of the nation to any significant degree. Demographics will still pour tens of millions of new Social Security and Medicare recipients onto the rolls. Funding for things that provide for a strong future — education, transportation, health research, security spending, science — will continue to take the brunt of fiscal restraint.

In all likelihood, the JSC will come up with the mandated $1.2 trillion in deficit reduction and pass the mess on to the House and Senate for final passage. Much of the deficit reduction may be real, some phony, and some concocted by baseline adjustments. None of it, just like that $917 billion in cuts contained in the BCA, will change the debt trajectory of the nation to any significant degree.

In short, the BCA and the likely product of the JSC will prod the nation along the same path of “eating our seed corn.” Investments in the future will yield to current consumption. The outcome will reveal once again how hard it is for humans to forego current pleasure for long-term gain.

At the present rate, America’s national debt will hit 100 percent of forecast Gross Domestic Product shortly. In another 15 years, it will near 200 percent of GDP. And, like a hyperbolic curve, it will rush towards 300 percent in subsequent decades.

Will that happen? Of course not. Investors won’t continue to lend to a nation with that debt profile. In order to bring some fiscal order in the future, rapid and severe cuts in spending and increases in taxes, along with further depreciation of the currency, must occur. The pain will be enormous and have serious economic consequences.

If the Congress and the JSC fail to confront this reality now — when the changes are reasonably easy and can be phased in over time — then this inaction will bring the nation to a fiscal cliff. As even some members of the JSC said recently, “This is the easiest to predict looming disaster of all time.”

Rigid ideology on both sides, a political polarization unseen in this country in more than 40 years, may doom the nation and the dollar to a much lesser status. If so, the political leaders of this era will go down in history with justly-earned blackened reputations.

Steve Bell is Senior Director of the Economic Policy Project at the Bipartisan Policy Center. He is a longtime aide to former Senator Pete Domenici, serving as the Senator’s Chief of Staff and as the Staff Director of the Senate Budget Committee, which Senator Domenici chaired.