Daily Updates

December 2, 2013

Blue ribbon panels stumble on trimming red ink

WASHINGTON — Since the end of World War II, more than a dozen high-profile bipartisan panels have been convened to tackle the nation’s thorniest fiscal problems. Seldom have their recommendations spurred congressional action.

Their ambitious, high-octane reports and recommendations are mostly gathering dust on government shelves.

Right now, congressional negotiators are struggling with a way to head off another looming government shutdown and debt ceiling crisis that could strike early next year. A 29-member bipartisan panel faces a Dec. 13 deadline and daunting odds.

History is not on its side.

A bipartisan “supercommittee” tasked with finding ways to cut the federal deficit by at least $1.2 trillion over 10 years crashed, burned and expired in November 2011.

“We end this process united in our belief that the nation’s fiscal crisis must be addressed and that we cannot leave it for the next generation to solve,” its leaders, Rep. Jeb Hensarling, R-Texas, and Sen. Patty Murray, D-Wash., said in a joint statement of frustration.

A 2010-11 deficit-reduction panel led by former Sen. Alan Simpson, R-Wyo., and Democrat Erskine Bowles, a former chief of staff to President Bill Clinton, produced a comprehensive deficit-cutting plan that was widely praised but mostly ignored, even by President Barack Obama, who created the group.

Simpson called the plan “the only one that irritates everybody” and therefore “the only one that will work.”

Proposing a batch of highly detailed government spending cuts and tax increases, the recommendations won many bipartisan plaudits, but little support from either party.

It failed, Simpson later suggested, because Democratic and Republican lawmakers alike “all worship the god of re-election.”

The Grace Commission was created in 1982 by President Ronald Reagan to go after waste and inefficiency in the federal government. Headed by businessman J. Peter Grace, the commission produced hefty recommendations it claimed would save the government $424 billion over three years. Reagan and Congress largely ignored its report.

One of the few special panels generally hailed as a success is the 1981-83 Social Security commission chaired by Republican economist Alan Greenspan, who later served for 19 years as Federal Reserve chairman under four different presidents. His panel is credited widely with rescuing the old-age benefit program from insolvency.

It recommended an increase in the Social Security payroll tax, trimming some benefits, especially for younger retirees, and gradually raising the retirement age for full benefits. For once, Congress went along.   But it was hardly a smooth ride.

The panel quickly deadlocked, with Democrats opposing benefit cuts and Republicans opposing higher Social Security taxes. It came up with its big fix only after the direct, heavy intervention by Reagan and House Speaker Thomas P. O’Neill, D-Mass.

Why the otherwise poor record for such major bipartisan panels?

“They never really accomplish anything because they’re substitutes for action,” said Bruce Bartlett, a former economic adviser to Presidents Reagan and George H.W. Bush. “They give presidents and Congresses a way of appearing to be doing something substantive about a problem without actually doing anything.”

Bartlett isn’t optimistic about the current effort by congressional negotiators.

“They just cannot overcome fundamental disagreements. Neither side really has any incentive to compromise with the other because they’re so far apart. The Democrats are not going to agree to a grand bargain that doesn’t include new tax revenues and the Republicans are not going to agree to a grand bargain that does include revenues,” Bartlett said.

Such panels “start off with a strike against them. Namely, that only the really tough stuff ends up on their plate,” said William Galston, who was a domestic policy adviser to Clinton. “And, obviously, all of this gets harder if you’re in a period of intense political polarization.”

The 29-member budget conference committee is trying to head off repeat twin fiscal crises like last month’s government shutdown and debt-ceiling battles.

For now, a short-term spending bill is keeping the government running, but only through Jan. 15. The current debt ceiling runs only through Feb. 7. While Washington has never defaulted on its financial obligations, it came close last month and in August 2011.

The conference committee is not a specially created blue-ribbon panel as such, but a standard legislative gathering named to reconcile House and Senate budget differences. But because this is the first time in five years both chambers have passed an annual federal budget, the panel is drawing exceptional attention.

Longtime budget consultant Stan Collender sees “little to no interest in a major additional deficit reduction plan on Capitol Hill at the moment” and doubts any grand bargain will emerge from the negotiations. He suggested it will, at most, come up with a set of proposed alternative spending cuts to replace $21 billion in across-the-board cuts now scheduled to take place in mid-January.

High-profile fiscal commissions are intended to provide political cover to policymakers to enable them to vote for unpopular changes in federal programs as part of a package deal. But failures have outnumbered successes.

Sometimes you have to take what you get.

The 1947-49 Hoover Commission was appointed by President Harry S. Truman to reorganize and trim the federal bureaucracy. A second one was created by Congress in 1953 during the administration of President Dwight D. Eisenhower. Roughly half their recommendations were adopted.

Still, that’s not a bad outcome by recent standards.


Follow Tom Raum on Twitter: http://www.twitter.com/tomraum


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