April 20, 2014

Bixby and Imhof: Leave Committee with Full Plate

The following Op-Ed was published by the Ames Tribune on September 28, 2011.

By Robert L. Bixby and Sara Imhof

 

A few months ago, President Obama and House Speaker John Boehner flirted with the idea of a grand bargain on deficit reduction that would have included cuts in the big entitlement programs and increased revenues.

For a brief moment, these two leaders appeared to have grasped an essential point: To make meaningful progress on the deficit, all options must be on the table.

Those days are gone.

Not only did the grand bargain flounder in political headwinds, but its two main proponents have now turned their attention to clearing the table of key elements they once recognized had to be there.

First it was Boehner, who declared in a speech to the Economic Club of Washington last week that tax increases should be off the table for the new deficit-reduction “super committee.”

According to Boehner, the “only option” is spending cuts.

Boehner did endorse ending or limiting the many tax subsidies that bleed $1 trillion from revenue collections each year, add complexity to the tax code and distort economic choices. However, he added a corollary that all increased revenues must go to lower rates and none to deficit reduction.

Then it was Obama’s turn on Monday, when he pointedly omitted Social Security, one of the federal government’s largest programs, from his list of long-term deficit reduction reforms.

Obama did not take the entire concept of entitlement cuts off the table. In fact, he disappointed many in his party by proposing additional Medicare cuts.

However, these changes are a relatively small part of his overall plan, and by taking Social Security off the table for now he signaled an unwillingness to consider the full range of budgetary pressures we face.

In both cases, it was a giant step back from the grand bargain.

The positions Obama and Boehner have retreated to are familiar territory. You might even call it politics as usual.

Republicans like to pretend that taxes can only go down, regardless of the circumstances. But consider the facts:

We have spent a decade at war. We have added a prescription drug benefit to Medicare. Interest costs on the growing debt are projected to balloon. In the years ahead, rising health care costs and an aging population will greatly expand the costs of Social Security, Medicare and Medicaid, which already comprise more than 40 percent of the budget. And the tax code is brimming with backdoor spending in the form of deductions, credits and exclusions.

Even with significant spending restraint, it is unrealistic to think that we can adequately cover all our expenses with today’s level of revenues. The numbers don’t work.

Democrats (and many Republicans) like to pretend that Social Security is not really part of the budget even though its growing cost will put a strain on general revenues. Already, the program is spending more than it takes in. Payroll tax cuts have widened the gap, which will only grow worse as more baby boomers move into their retirement years.

The politics of deficit reduction are hard enough without our political leaders building walls around favored items. The more they take off the table, the more difficult it becomes to reach consensus on what is left. If one program or tax benefit is protected, why not others?

Exemptions sow resentments, destroying the needed sense of shared sacrifice. Should military veterans accept a cut in their benefits when Social Security can’t be touched? Should seniors have to pay more for Medicare when workers get a tax cut?

This political dilemma was recognized by two bipartisan fiscal commissions last year that recommended broad changes across all segments of the budget. It was recognized earlier this year by Obama and Boehner.

Yet even as they urge the super committee to exceed its statutory mandate to cut $1.5 trillion over the next 10 years, their table-clearing has made that task more difficult. They should leave the committee with a full plate.

Robert L. Bixby is executive director of The Concord Coalition, a national organization advocating fiscal responsibility. Sara Imhof is Concord’s Midwest regional director, based in Iowa.

Panel Discussion

What: Fiscal Solutions Tour, presented by the Concord Coalition

When: Thursday, Sept. 29, 7 p.m.

Where: Sun Room, Memorial Union, Iowa State University

Cost: Free