by Alex Kingsbury

President uses executive order to deal with a hot-button political issue

There's an old maxim in Washington that when politicians are either unable or unwilling to tackle a problem directly, they appoint a commission to give the issue more intensive study. So it was last week when President Obama created the National Commission on Fiscal Responsibility and Reform, a bipartisan group of 18 souls charged with solving perhaps the country's most vexing and pressing public-policy problem--red ink.

Commissions can be useful by taking ownership of politically unpopular ideas that neither political party could endorse in isolation, but they also are notoriously impotent in getting their recommendations enacted. That's why the president originally envisioned a panel with more teeth. But Democratic senators, and several from the GOP who at first backed the measure, ended up voting down a bill that would have created such a commission last month. They cited familiar political concerns: Democrats feared sharp spending cuts, while Republicans feared additional taxes.

In the end, the president was forced to create the bipartisan group through executive order, which gives the commission considerably less political capital to get its final recommendations translated into action. A congressionally mandated commission would have meant a guaranteed vote on its proposals. The commission announced last week, cochaired by Alan Simpson, a former Republican senator, and Erskine Bowles, a Democrat who was White House chief of staff for Bill Clinton, has no such leverage. As part of its charter, the group will examine cost-cutting and containment measures for entitlement programs, as well as the tax code.

While the group's work will not be completed until December, the broad consensus among economists is as self-evident as it is politically perilous: Spending cuts and tax hikes will both be necessary parts of any successful scheme for long-term debt reduction. "The politics of dealing with chronic deficits is fraught with hard choices, and therefore it's treacherous to officeholders here in Washington," Obama said, noting that "as a consequence, nobody has been too eager to deal with it." Meanwhile, the problem is getting exponentially worse.

Amid the economic downturn, with tax revenue declining and government spending mounting, the scope of the budgeting problem is all the more staggering. Last month, the federal government's budget was nearly $43 billion in the red, pushing this year's total deficit to $430 billion. Last year, the deficit hit a record $1.4 trillion, nearly 10 percent of the gross domestic product, the highest level since World War II. The new commission's charge is to cut the deficit to 3 percent of GDP by 2015.

While discretionary spending is a politically popular whipping boy, experts say the far more important issue is the expected growth of the big three entitlement programs: Medicare, Medicaid, and Social Security. Those programs currently account for about 40 percent of the nation's budget. "Even after the recession abates, its lingering effect, the extension of a number of deficit-financed policies, demographic changes, and growing healthcare costs will all create an unsustainable fiscal situation where the debt will continue to grow as a share of the economy," concluded a study issued this week by the nonpartisan Pew Charitable Trusts and the Peter G. Peterson Foundation.

But as the rejection of a congressionally mandated commission suggests, neither party is particularly keen on backing unpalatable solutions. Republicans, buoyed by the surging populism of the tea party protesters, are using government largess as a rhetorical cudgel with increasing effectiveness, while Democrats continue to claim the banner of defenders of popular government entitlement programs. Certainly, the eventual solution, whether it comes as a result of this panel or not, will have plenty for both parties to despise. But like it or not, the president noted while signing the executive order, "everything is on the table."

 

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Obama Creates Commission to Shrink Deficit | Alex Kingsbury

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