Does Anyone Feel That Shaking Beneath Their Feet Besides Me?

With its deadline swiftly approaching, the so-called super committee got some bipartisan cover from a respected panel of budget experts this week. The experts testified to the committee warning strenuously against inaction and urging it to consider sweeping changes to the federal government. With all of the focus on presidential candidates suffering brain-freeze or sex scadals, and the horrific situations at Penn State University, the high-stakes committee meetings and budget talks have, been ignored by the news media and consequently the American public.

“I have great respect for you, individually. Collectively, I’m worried you’re going to fail, fail the country,” said Erskine Bowles, the former chief of staff for President Clinton and co-chair of President Obama’s fiscal commission.

The experts also urged the super committee to consider revenues as part of the bargain, along with significant changes to programs like Medicare, Medicaid, and Social Security. “Without substantial new revenues and entitlement reform, our fiscal ship is destined to capsize,” said former New Mexico Sen. Pete Domenici, a Republican, who co-chaired a separate budget commission.

Former GOP Sen. Alan Simpson of Wyoming, who co-chaired the Obama deficit commission with Bowles, urged the committee members to forget about political fallout and stick to their guns. Recounting battles against the retiree group AARP and what he called “professional veterans,” he bragged that he had never lost an election as senator.

The super committee is supposed to come up with at least $1.2 trillion in cuts over the next 10 years. Nevertheless, the panel urged members to consider as much as $4 trillion, including an overhaul of the tax code and defense spending reductions. At a time when many are questioning whether the committee can deliver on its task, the expert panel urged it to think bigger.

I am at a total loss to understand how elected representatives to both houses of Congress can take cripplingly partisan and destructive stances with all that is so badly around the globe, as well as in the United States.

A lack of reliable information about the super committee’s dealings has led to the wringing of hands and wild speculation increasingly nervous observers.

One would think that the testimony from respected budget experts would give the committee the political cover it needs to go with an ambitious approach. Republicans asked the panelists about a premium-support Medicare reform plan, along the lines of what Wisconsin Representative Paul Ryan proposed and the Republican House passed.

It’s a nonstarter for Democrats.

Meanwhile, Democrats noted that harsh budget cuts in the short term could harm economic growth, to which all the witnesses agreed. There is, however, one area where Republicans on the super committee might be willing to consider additional revenues.

During the hearing, Texas Rep. Jeb Hensarling, the committee co-chair, asked the panelists whether they favored a “chained” consumer price index. All of them did. The chained CPI, a more complex measure that was discussed but ultimately abandoned during the debt ceiling talks this past summer. It would slightly trim Social Security cost-of-living benefits while slowing the rate that income tax brackets rise, so that those on the margins might end up paying more.

Most economists say a chained CPI is a better way to gauge the cost of living, but a benefit cut is still a benefit cut. Minutes after the hearing was over, Democratic staffers from the House Ways and Means Committee sent out a release noting that it could mean as much as $560 less each year in benefits by the time a worker reaches age 75. Even if Democrats were willing to give on that issue, the gains would be short of the overall goal. The Congressional Budget Office estimates that a chained CPI could save about $200 billion over the next 10 years. Although that is substantial, it is hardly enough to get the committee to the finish line.

But I have a bad feeling that something even more disruptive is coming down the pike. That being, that whatever the super-committee may come up with will be defeated. Once that happens, the newly stark, “un-Mavericky” Senator McCain and his two partners-in-most-crimes, Lindsey Graham and Joe Lieberman, will advance a proposal to exempt defense from the mandatory across-the-board budget cuts.

Such a proposal will not only make for an undoubtedly tectonic reverberation in Washington, but it would just as likely set off a country-wide maelstrom dragging the country into a new disastrous sinkhole at the very time we can least afford the luxury of political and economic upheaval.

hg

  1 comment for “Does Anyone Feel That Shaking Beneath Their Feet Besides Me?

  1. jackarm
    November 11, 2011 at 8:22 pm

    Prediction – before the SC due date. The Republicans will agree to a tax increase for income over $1M. They will also agree on closing some loopholes and dropping some subsidies.

    Democrats will turn this down because the requested corresponding budget cuts will be more than they can handle.

    Republicans will blame democrats and vice versa. Since these “draconian” cuts do not take place till 2013 – nothing will happen and debt will continue to grow. What are we at now $15 trillion and growing? 60 plus % of GDP. we will be downgraded again. not sure what happens after that.

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