Newspaper article The Christian Science Monitor

Will Obama Take Lead on National Debt and Budget Deficit?

Newspaper article The Christian Science Monitor

Will Obama Take Lead on National Debt and Budget Deficit?

Article excerpt

Commission's draft proposal on cuts and taxes to slash national debt has riled partisans on both sides. Next major move is President Obama's.

"This huge debt that we face is something we can't deny."

So declares Erskine Bowles, Democratic co-chair of the bipartisan debt commission appointed by President Obama to address the nation's unsustainable fiscal path, speaking at a Monitor breakfast Nov. 19.

Indeed, ideas for addressing Wash-ington's off-kilter balance sheet have become all the rage.

Mr. Bowles and his Republican co-chair, former Sen. Alan Simpson, put out a draft proposal Nov. 10 that elicited fierce squawks from liberals and conservatives alike - but also some praise from interest groups for at least launching the conversation.

A week later another bipartisan group, chaired by former Clinton budget chief Alice Rivlin and former Senate Budget Committee chair Pete Domenici (R), came out with an even tougher proposal.

Add to the mix new Republican fervor for eliminating congressional earmarks, pet projects of lawmakers. Mr. Obama and a few Democrats have backed the idea, though the potential savings amount to a fraction of 1 percent of federal spending - and there's no guarantee the executive branch doesn't spend the money.

Yet missing from the conversation in any kind of forceful way has been the president himself. When former Senator Simpson and Mr. Bowles, President Clinton's former chief of staff, put out their draft plan (in a surprise move three weeks before the final report's Dec. 1 due date), Obama was in Asia. A spokesman said he would wait for the final report before commenting.

Obama's Nov. 13 radio address did take a baby step toward committing on fiscal matters: In addressing earmarks, he spoke of putting "our country on the path of fiscal discipline and responsibility."

But Obama probably can't rely on others to do the heavy lifting. Few observers expect the fiscal commission to reach the supermajority needed - 14 out of 18 members, most of them politically sensitive members of Congress - to approve a final report. That means Congress is likely not to face a vote on its recommendations.

But final report or not, Obama has an opportunity to demonstrate leadership on a matter of central national importance. Dec. 1 "should mark the handing of the torch to the president to start running with this issue," says Maya MacGuineas, director of the Fiscal Policy Program at the New America Foundation in Washington.

The early release of the co-chairs' proposal was a "huge game changer," says Ms. MacGuineas. "It's allowed the White House to gradually pivot from focusing all on economic recovery to making [the nation's long-term solvency] part of the economic recovery story."

The Bowles-Simpson plan puts everything on the table - spending cuts that anger Democrats and tax increases that anger Republicans.

On the spending side, nothing is spared: defense; entitlements like Social Security, Medicare, and Medicaid; discretionary programs. The federal payroll would be cut by 10 percent through attrition.

On the tax side, income tax rates would go down, but popular tax breaks such as the mortgage interest deduction and the tax exemption for employee health benefits would be reduced or eliminated. The 18.4-cents-a-gallon federal gasoline tax would gradually rise by 15 cents a gallon to pay for transportation spending. …

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