The special congressional committee on deficit reduction recently heard testimony from the leaders of two prominent bipartisan panels that developed sweeping proposals that could cut federal borrowing by $4 trillion or more in the next decade -- well above the committee’s assigned goal of $1.2 trillion to $1.5 trillion.
Appearing at the committee’s hearing last week were former Sen. Alan Simpson (R-Wyo.) and former Clinton White House Chief of Staff Erskine Bowles, co-chairs of President Obama’s National Commission on Fiscal Responsibility and Reform, and Brookings Senior Fellow Alice Rivlin and former Sen. Pete Domenici (R-N.M.), co-chairs of the Bipartisan Policy Center’s Debt Reduction Task Force.
Both the fiscal commission and the task force produced balanced reports that deserve careful consideration. Their co-chairs last week emphasized the importance of the super committee’s assignment and offered a variety of constructive suggestions for developing a credible, far-reaching fiscal plan by the panel’s Nov. 23 deadline.
In a column this week in the Milwaukee Journal Sentinel, Diane Lim Rogers, chief economist for The Concord Coalition, points out that the super committee has many different options available.
She suggests that committee members take a comprehensive approach and make a commitment to “strict, no-exceptions, pay-as-you-go rules” for new or extended tax cuts as well as spending increases.
Rogers also emphasizes that the best policies to support the economy in the near term are those that most effectively stimulate demand -- which are not necessarily the best policies to encourage longer-term economic growth. A critical question in either case, she says, is how deficit financing of such policies affects their results.
Last week Concord Coalition Executive Director Robert Bixby suggested that with their deadline fast approaching, super committee members could combine their initial deficit reduction package with instructions to the committees of jurisdiction to go further. This, he wrote in a blog post, “would allow the process to go big by keeping it going.”