This Op-Ed was originally published on CNBC.com. Click here for original post.
“After all the talk about debt and deficits, it is long past time for America’s leaders to put up or shut up. The era of debt denial is over, and there can be no turning back.”
That was the blunt assessment of Erskine Bowles and Alan Simpson, co-chairs of the President’s National Commission on Fiscal Responsibility and Reform, when they presented a sweeping deficit reduction plan to their fellow commissioners on December 1.
Are they right?
The answer may rest with three key players—President Obama, Rep. Paul Ryan, and Sen. Kent Conrad. Each has the responsibility of presenting a budget early next year. If these three men decide not to turn back, the era of deficit denial will indeed be over.
A good first step would be for Obama and Ryan, along with other party leaders, to embrace Conrad’s idea of a budget summit.
In early February, Obama will present his budget to Congress. He will need to show a serious commitment to deficit reduction without being seen by the Democratic Party base as having caved-in to Republicans.
Ryan will then draft his own budget designed to win approval from a new House Republican majority determined to put its mark on fiscal policy. At the same time, Conrad will present his draft budget to the Senate, where the Democrats will have a diminished majority and a wary eye on the 2012 reelection prospects of several moderates in the party, including Conrad himself.
The path of least resistance for all three of these key players would be to dig in, tend to their political bases and blame each other for gridlock. We’ve seen that movie and it doesn’t end well. Deficits would rise, along with public anger.
There’s a better way. It’s called compromise. And the Bowles-Simpson commission showed how it’s done.
According to conventional wisdom, big Republican gains in the mid-term elections doomed any chance of the commission producing a plan with bipartisan support. Instead, when commission members faced the choice of gridlock or compromise, 11 of them -- five Democrats, five Republicans, and one independent -- supported the co-chairs’ plan.
While the commission was not able to achieve the super-majority required to make an official recommendation, it succeeded in producing a plan with majority bipartisan support that would bring the deficit down to a sustainable 2 percent of GDP by 2015 and steadily lower deficits after that.
Critical to this unusual bipartisanship was that the plan requires broad sacrifice. It puts all parts of the budget in play and does not pretend that popular programs can be exempted or that current federal revenue is sufficient.
Major elements of the plan are sensible reforms that would be phased in to produce lasting savings after the economy recovers. These include cost-saving reforms of Social Security, Medicare, farm subsidies, government retirement programs, domestic discretionary programs and defense. The plan would also reform the tax code to bring in more revenues by broadening the base of taxation while lowering rates.
Because everyone’s ox was gored, commission members were free to determine whether, in pursuit of a brighter fiscal and economic future, they were willing to accept parts of the plan they didn’t like in exchange for parts they did like. Those who voted “yes” understood that if everyone held out for their own versions of perfection, they would never get beyond gridlock.
Meanwhile, the Bipartisan Policy Center’s Debt Reduction Task Force, led by two veterans of past deficit-reduction efforts—Pete Domenici and Alice Rivlin—issued an equally valuable report. It, too, showed how bipartisan consensus could be forged through a mix of spending reductions and revenue increases.
Nothing says that these recommendations must be put on a shelf. It is true that the plans contain unpopular elements. However, if popularity is a strict criterion, policymakers might as well sit back and wait for the inevitable fiscal crisis because they will never eliminate trillion-dollar deficits with “popular” options.
As the Fiscal Year 2012 budget process get underway, the two parties need to find a way to negotiate with each other. So-called “regular order” will simply result in three distinct budgets that have no hope of being adopted.
Constructive engagement would be far more productive.
If Obama and Ryan join Conrad’s call for a summit to negotiate a joint budget plan—building on the solid groundwork of the two commissions—they may be able to achieve a game-changing breakthrough. That assumes, however, that they want the game to change and that they could get other party leaders and partisan guardians and to go along with the idea.
The commissions showed that people of differing perspectives can reach consensus if they enter into the process with a determination to reach an agreement for the common good. Moreover, the public is willing to accept the necessary sacrifices to build a better future if they understand the magnitude of the problem and the realistic trade-offs among the options.
The missing element is political leadership. Obama, Ryan and Conrad can fill the void.
Robert L. Bixby is Executive Director of The Concord Coalition, a nonpartisan, grassroots organization dedicated to fiscal responsibility. He frequently represents Concord's views on budget and entitlement reform policy at congressional hearings and in the national media.