President Obama’s debt commission was designed to be insulated from politics. With 10 Democrats and eight Republicans, the panel would give both sides cover to make the difficult choices—tax hikes and spending cuts—necessary to reduce the deficit. But a hearing on Wednesday—the commission’s third since its creation in April—proved the insulation was flimsy at best.
The hearing’s only witness was Doug Elmendorf, director of the Congressional Budget Office and therefore Washington’s most deliberate nonpartisan. He doesn’t opine. He doesn’t make policy recommendations. He simply makes budget estimates based on current law. (Check out his new projection here.) But no matter how many times Elmendorf repeated this mantra, it didn’t seem to get through. Instead, Democrats and Republicans spent the morning trying to get Elmendorf to confirm their own vision of the world.
Former Sen. Alan Simpson of Wyoming, the commission’s Republican co-chairman, began the hearing with a lamentation about its politicization. Instead of honest criticism, critics use “flash words” to undercut its mission: “Cut social security. Balance the budget on the backs of seniors. Nail the rich. Cheat the poor. Hurt doctors. Help lawyers.” He also took issue with his own portrayal as an “ornery old rump.”
Elmendorf was careful not to take a stance on anything, including Simpson. After a depressing summary—debt as a percentage of GDP is higher than at any time since World War II; bringing it back down to a sustainable level would require cuts that “represent the near elimination of all government programs except for Social Security Medicare, Medicaid, and national defense”—he presented two budget projections. One assumes current laws continue, while the other assumes certain laws change—that the Bush tax cuts aren’t allowed to expire, the Alternative Minimum Tax patch continues, and the “doc fix” that props up physician reimbursement remains. He also made sure not to endorse one particular approach to reining in the budget: “There’s no intrinsic contradiction between fiscal stimulus and fiscal restraint a few years from now,” he said. When Sen. Dick Durbin, D-Ill., asked him when Congress should declare the recession over and move ahead with deficit reduction, Elmendorf called time out: “You used the word should, and you know should is not a word the CBO uses.”
Even so, every panelist tried to lure Elmendorf over to their side. Democrats complained that the CBO’s alternative budget projection—the bleak one that assumes the Bush tax cuts, AMT patch, etc., stay in place—doesn’t give health care reform enough credit, since it assumes that many of the cost savings in the bill will disappear after 2020. “What you’re affirming is if key elements of the health care bill were repealed, the deficit would grow even more,” said Rep. Jan Schakowsky of Illinois, adding that such an assumption oversteps the CBO’s mandate. “You’ve taken a hypothetical about future congressional action,” she said. “We should use you as prognosticator and fortune teller.” Sen. Max Baucus of Montana, too, griped that the CBO’s projection has “raised some eyebrows” by “trying to predict what Congress will or will not do.”
Elmendorf argued that health care reform wasn’t that big a deal, at least from a budget standpoint. Cost savings due to Medicare were comparatively small. “Well,” said Baucus, “our challenge is to prove you wrong.”
Republicans didn’t hesitate to show their hand either. Rep. Jeb Hensarling of Texas, prefacing his remarks by noting that the stimulus was an “abysmal failure,” asked Elmendorf whether it’s fair to say that health care reform was “not a game changer.” Elmendorf didn’t bite, emphasizing instead that it’s hard to predict long-term growth rates decades from now. “OK,” Hensarling said. “I’ll use the phrase ‘not a game changer.’ ”
Rep. Paul Ryan of Wisconsin took a swipe at health care reform, too, highlighting a graph that compared future federal spending with health care reform to growth without it. He said it looked to him like the reforms “don’t really bend the cost curve very much. The health care prices are still going up even with the passage of this legislation, is that correct?” Elmendorf basically said they were using current growth rates and it was too far out to predict.
Other Republicans tried to write the future by pushing Elmendorf to use the alternative scenario as his baseline. That is, to assume that the Bush tax cuts and AMT patch and doc fix—all of which put money in the pockets of Americans—are permanent. That assumption may be more realistic. It’s also partisan, implicitly daring the Democrats to “raise taxes.”
All the disagreement made Durbin pessimistic. “We have a pretty tough challenge here,” he said. “I don’t know if it’s politically possible. I look around the table, and we all view the world in different terms.”
The only people who seemed willing to set partisanship aside were the two guys who don’t need to worry about getting re-elected: Co-chairmen Alan Simpson and Erskine Bowles, who was President Bill Clinton’s chief of staff. Simpson reiterated that getting to zero will be painful. Health care reform won’t be enough. And unless Democrats get comfortable with spending cuts and Republicans learn to love tax hikes—he rattled off a list of taxes Ronald Reagan raised—we might as well just surrender now. “If we don’t get anything done by Dec. 1,” he said, “I’m out there in the high country and you can tap on my box in 20 years and tell me how it worked out then.”
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