MY VIEW: Alice Rivlin and Pete Domenici
With Congress is in recess, it's likely we won't see a deal this week, but the December 13th deadline for the budget conference committee is fast approaching. Expectations for an agreement are mixed, but in an article in this weekends's U.S. News and World Report, CRFB board member and former CBO Director Alice Rivlin and former Senator Pete Domenici (R-NM) believe that there is a significant opportunity to do something about our long-term fiscal problems.
A budget resolution is limited in what it can achieve, but Rivlin and Domenici argue that it can form the foundation for significant legislation:
Conventional wisdom about the outcome of the Budget Conference Committee – co-chaired by House Budget Chairman Paul Ryan, a Republican, and Senate Budget Committee Chairwoman Patty Murray, a Democrat – is that nothing much will happen. At best, they will cut a small-bore deal to avoid another government shutdown or debt crisis before the congressional elections in November. They will fail to enhance near-term growth or tackle the tax and entitlement reforms needed to stabilize future debt increases. The excuses are: the challenges are too big, time is too short and conferees don’t have the legislative tools to do anything substantial.
Time for the conferees is short, but they have the option of buying more time for the big decisions. The challenges are huge, but the consequences of failure are even worse. Most important, the conferees have a legislative tool – reconciliation – at their disposal that enables them to find a lasting solution, if they have the will to do so.
We called for the conferees to push for budget reconciliation in our report, What We Hope to See From the Budget Conference Committee, particularly to achieve significant entitlement and tax reforms. Of course, this will inevitably require tough decisions to be made, but Rivlin and Domenici argue that it will ultimately be necessary.
Both sides fear reconciliation. Republicans fear it will lead to higher revenues. Democrats fear it will lead to future reductions in Medicare, Medicaid and Social Security benefits. In other words, both are afraid to even discuss the changes needed to grow the economy faster and start the nation’s debt accumulation on a downward path. Both are afraid to do more than kick the proverbial can down the road one more time.
But fear is not a strategy. All of the bipartisan budget strategy groups, including the Debt Reduction Task Force that we co-chaired at the Bipartisan Policy Center, have proposed reforming income taxes to enhance economic growth and raise more revenue without raising tax rates. They also recommended slowing the growth of health care entitlements by making care delivery more efficient and preserving Social Security for future retirees by making the program solvent.
We've shown before that budget reconciliation can be a powerful tool in achieving deficit reduction. There is still time for the budget conference to develop the framework for a comprehensive deficit reduction plan and we shouldn't dismiss the opportunity that the conferees have right now.
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"My Views" are works published by members of the Committee for a Responsible Federal Budget, but they do not necessarily reflect the views of all members of the committee.