Friday, December 3, 2010

Deficit Commission Report

I have an op-ed in the Dec. 3 Raleigh (NC) News and Observer that argues that we need to go ahead and hash out a long term plan to move toward a balanced budget now, before a debt-driven financial crisis forces us to act. The Deficit Commission report was approved 11 to 7, but required 14 yes votes to trigger a guaranteed vote in the House and Senate. However, it is not clear to me exactly how this would have worked because the plan has not been put into legislative language.

There was more bipartisan agreement in voting for the plan, with Republicans Crappo, Gregg and Coburn joining Conrad and Durbin in voting for the measure, with only Baucus voting no. All 3 House Republicans voted no, as did Rep. Schakowsky.

The next big question is whether the President will put some of these policies in his budget, which would serve to keep attention on the issue of addressing our long term fiscal problems.


  1. Why does EJ Dionne, a progressive that I respect, call Bowles-Simpson a "deeply conservative document"? You make a strong case for the 21% of GDP being a reasonable target for revenues and taxes. Do progressives really believe we should be spending as much as 1 in 4 dollars of our entire domestic product on the federal government? I tend to agree with Dionne that the distributional effects of the Commission proposal need to be modified, but he is wrong to focus on just the marginal rates -- rather, we should be looking at how much of the tax burden is being paid by the super wealthy, wealthy, middle class, and poor under the Commission's proposal.

  2. One thing some progressives haven't understood is how many of the tax expenditures benefit higher income persons. So, a tax reform that lowers rates by ending tax based preferences is a progressive approach to addressing the deficit. You can even add back a few tax expenditures such as the Earned Income Tax Credit. So far as what Dionne says, I am not sure, except that you could say that a balanced budget is a conservative idea. It is just that conservative american politicians haven't practiced what they have preached.