It’s (Still) Time for a Bipartisan Fiscal Commission

The U.S. fiscal outlook is currently unsustainable. A new fiscal commission can help policymakers work on a bipartisan basis to identify the necessary tax and spending changes to help improve the nation’s fiscal outlook.

Annual budget deficits currently total around 6% of gross domestic product (GDP) – roughly twice as high as what is needed to put the debt on a sustainable path. Meanwhile, the national debt is expected to reach a record share of the economy within three years, and three major trust funds – for highways, Medicare hospital insurance, and Social Security retirement – are on course to run out within 7 years.

To tackle our nation’s fiscal, economic, and budgetary challenges, policymakers should establish a bipartisan, bicameral fiscal commission. The commission should put all parts of the budget and tax code on the table to facilitate earnest negotiations. And political leaders should commit to considering its recommendations.

This paper is an update of our 2023 paper on commissions. In it, we show that:

• Commissions have often helped to effectuate policy change; sometimes by having their recommendations enacted, but often by facilitating bipartisan negotiations, developing and socializing policy solutions, and elevating public discourse on important policy issues.
• Successful commissions create a safe space for negotiations, offer opportunities for bipartisan cooperation, solicit input from Congress and stakeholders, rely on Presidential and Congressional leadership, and often include some type of fast-track process and/or enforcement mechanism.
• The current fiscal and economic situation makes a fiscal commission particularly timely.

Historically, commissions have helped policymakers to extend the life of Social Security, consolidate military bases, identify government waste, develop frameworks for tax reform, improve homeland security after 9/11, and draw attention to our unsustainable fiscal outlook.

Ultimately, Democrats and Republicans will need to come together to consider revenue and spending changes to address our nation’s most serious fiscal challenges. A bipartisan commission can help facilitate these discussions and support efforts to usher in a new era of responsibility and prosperity.

Past Commissions Have Succeeded in Many Different Ways

Throughout history, policymakers have turned to commissions when confronted with difficult decisions related to the economy, oversight, government waste, military base consolidation, budget deficits and debt, national security, energy and federal lands policy, homeland security, health care, great power competition, trust fund solvency, and the structure of the tax code.

There have been hundreds of commissions, task forces, and similar committees established over the years – some through executive action, some through legislation, and some through other processes. Some of these commissions failed to reach agreement, but many commissions have succeeded. That success has taken many forms. Past commissions have:

• Recommended policy changes implemented in full. Some commissions have developed recommendations that were enacted as written. For instance, the Base Realignment and Closure (BRAC) commissions were successfully used to consolidate military bases. And the 1974/75 Quadrennial Social Security Advisory Council recommended technical changes to Social Security’s indexation formula that were enacted in 1977.
• Facilitated bipartisan negotiations. In many cases, commissions have served to allow high-level bipartisan negotiations. For example, the 1983 Greenspan Commission helped President Reagan, Speaker O’Neill, and others negotiate a package that rescued Social Security from insolvency and extended its life for 50 years. In the aftermath of the deadliest terrorist attack in U.S. history, the 9/11 Commission served as an effective vehicle for bipartisan policies aimed at bolstering national security.
• Developed and socialized policy solutions. By bringing together experts and politicians from both political parties to focus on a specific issue, commissions provide an opportunity for the dissemination of new policy ideas. The 1982 Grace Commission, the 9/11 Commission, the 2005 Tax Reform Panel, and the 2010 Simpson-Bowles Commission all introduced numerous policy ideas that were enacted into law – often years later.
• Elevated public discourse around important policy issues. Sometimes commissions succeed by changing the conversation in Washington and among the public. The 9/11 Commission, for example, helped raise public awareness on some of our nation’s national security vulnerabilities. The 2010 Simpson-Bowles Commission raised awareness of the nation’s unsustainable long-term fiscal outlook and the need to look at all areas of the budget and tax code to address it, drove much of the conversation around fiscal policy, spurred high-level budget negotiations between President Obama and Speaker Boehner, and led to the enactment of the bipartisan, deficit-reducing Budget Control Act.

To be sure, commissions do not always succeed. There have been times when commissions have not been able to build the necessary consensus to offer recommendations, and times when the recommendations offered were not adopted until years later or never at all. However, they often have a better track record than the normal legislative process, and their establishment provides an opportunity for policy change.

Elements of a Successful Commission

The success of a commission depends on numerous factors – its composition, public opinion on the issues under consideration, and the ideologies and personalities of its members. To produce meaningful results, commission appointees should be committed to working to reach solutions rather than blocking an agreement. A commission’s work should also not be rushed, because with the benefit of time, trust can develop among the commissioners as well as between the commissioners and their staff. As Erskine Bowles recently noted about the Simpson-Bowles Commission, “you have to work at it for a long period of time to build that trust.”

Those designing a commission cannot build trust into a commission by fiat – trust must grow organically. But certain design choices can improve the likelihood that trust develops, agreements form, and that agreement turns into action.

Historically, some ingredients for success have included:

• Safe space for negotiations. Commissioners need to engage in open and frank discussions without fear of political reprisals or attack from special interests. Transparency fosters public trust and supports democratic outcomes, and recommendations should be vetted by the public before going to Congress. But negotiators must be able to deliberate without fear that ideas will be leaked before policies have been fully considered.
• Opportunity for bipartisan cooperation. Commissioners must be able to identify areas of consensus, make compromises, and negotiate trade-offs. In the case of fiscal commissions, this means that both revenue and spending must be considered with no sacred cows.
• Input from Congress and stakeholders. Commissions must be able to incorporate diverse viewpoints from those who understand the policies under consideration, along with the views of those who are impacted and those who must answer to voters on the issues. Engaging stakeholders, subject matter experts, and elected officials can bring credibility and pragmatism to the process and ensure different views are considered.
• Presidential and congressional leadership. The President and congressional leaders must be supportive of the process. A commission is often more effective when leaders express general support for their work from afar and make their most important priorities known without impeding the ability of commissioners to negotiate details.
• A fast-track process and/or enforcement. Special rules or penalties are often helpful to incentivize commissioners to reach an agreement, to ensure their recommendations are acted upon, and to shift blame in the name of avoiding an alternative. This could take the form of simply guaranteeing a vote, or waiving various legislative procedural hurdles, and/or of creating an automatic alternative or penalty in the case of failure.

Ultimately, no single design choice will make or break a commission. But commissions with strong leadership, representation of different viewpoints, Presidential and Congressional support, fast-track consideration or enforcement, and a process to negotiate without political interference probably have the best chance for success. But central to success is trust.

It's Time for a Bipartisan Fiscal Commission

With large deficits, heightened interest rates, record interest payments, a national debt approaching record levels as a share of the economy, and major trust funds approaching insolvency within seven years, a bipartisan fiscal commission is needed now more than ever. Although success is far from guaranteed, it offers the best chance to put the country on a more sustainable fiscal path.

A fiscal commission can bring Democrats and Republicans together to consider all areas of the budget and tax code and make thoughtful recommendations that both sides can agree upon.

The Problem Solvers Caucus has recently expressed support for this approach, as has the Bipartisan Fiscal Forum, and others.

Last year, a bipartisan group of House lawmakers – led by Representatives Bill Huizenga (R-MI) and Scott Peters (D-CA) – introduced the Fiscal Commission Act. Their bill would establish a 16-member fiscal commission, including 12 Members of Congress and four non-voting outside experts appointed by House and Senate leadership, who would be tasked with proposing revenue and spending changes to stabilize debt held by the public at or below 100%of Gross Domestic Product (GDP) by 2039 and ensure key federal trust funds remain solvent for at least 75 years. The commission’s agreed-upon recommendations would then receive expedited, no-amendment consideration in both chambers, while still preserving the 60-vote threshold for passage in the Senate.

Meanwhile, Representatives Steve Womack (R-AR) and Ed Case (D-HI) introduced the bipartisan Sustainable Budget Act, which would establish an 18-member commission composed of members selected by the President, the Speaker of the House, the House Minority Leader, and Senate Majority and Minority Leaders. The legislation requires this commission to recommend policies that would balance the budget within 10 years and improve the nation’s long-term fiscal outlook. Expedited legislative procedures would move the recommendations through Congress.

Commissions cannot replace the need for political will. But history has shown that they can help facilitate the necessary conversations to support meaningful policy improvements.

Given our current fiscal outlook, Democrats and Republicans will need to rise above partisan divisions and collectively confront our pressing fiscal challenges. By leveraging the power of bipartisan commissions and embracing the lessons learned from successful precedents, we can forge a path toward a new era of fiscal responsibility, ensuring long-term economic stability and prosperity for future generations.