We definitely needed another greybeard panel to tell us all to sacrifice to “get our fiscal house in order.” And that’s what we got today, with the Domenici-Rivlin Bipartisan Policy Center report on debt reduction. Pete Domenici is the former Republican Senator from New Mexico who at the end liked to walk around Congress in his pajamas; Alice Rivlin is the deficit scold Democrat who’s a member of the Catfood Commission.
Their report is basically similar to the Bowles-Simpson report. It includes tax reform of the “lower the rate, broaden the base” variety, with the innovation being the addition of a 6.5% “debt-reduction sales tax” (probably a nice way of saying VAT, a regressive sales tax). They “strengthen” Social Security with three of the four recommendations from Bowles-Simpson, jettisoning the increase in the retirement age while using progressive price indexing, changing the calculation of COLA and increasing the payroll tax cap to 90% of compensation. They “reform Medicare and Medicaid” with a lot of hand waving, a tax on soda, eliminating the employer deduction for health care (which would lead millions of companies to ditch their health care, no?) and not much else. They would freeze discretionary and defense spending and limit future growth. And they would basically keep the cost of government racheted down, regardless of demand for services, through a variety of means.
There’s really only one thing that sets Domenici-Rivlin apart from Simpson-Bowles, and that’s the acknowledgement that the economy needs spending right now to increase demand. Yes, spending in a deficit reduction report. Because they understand that economic growth will wipe away deficits (and I’m glad David Leonhardt gets this too). Domenici-Rivlin gets at this with a one-year payroll tax holiday that would cost $650 billion dollars. I would hope it could be structured so that not one dime gets lost from the Social Security and Medicare trust fund, but if so, that’s a big stimulus number, if a clunky one, since it only goes to people who are working.
All these deficit commissions and deficit reports, positioned to drop at the same time, are meant to give the indication that America needs to cut its deficit right now, despite 15 million people out of work. Never mind if the plan constitutes a transfer of wealth upward to the rich, or if it tilts in favor of cuts to services people need instead of tax fairness that the most fortunate of us can afford. Even Jan Schakowsky’s progressive plan concerns me, because it plays on this turf where the only responsible measure is to cut the deficit, which is the exact opposite of what we should be doing right now.
The expectation right now is that the Catfood Commission, the only game in town with any actual authority, won’t come to a consensus. But you have its leaders maneuvering to try and get a confirmed vote from a more Republican Congress after January.
Several members of the US fiscal commission are asking for a commitment from Harry Reid, the Democratic Senate majority leader, and John Boehner, the future Republican speaker of the House, to hold a vote on a final package to shrink the US budget deficit in the new Congress.
According to people familiar with the matter, both Republicans and Democrats on the panel have suggested that Erskine Bowles and Alan Simpson, co-chairs of the commission, receive additional assurances from congressional leaders that they would be prepared to vote next year on a proposal that garners a majority of 14 votes out of 18 on the commission.
At the moment, Mr Reid and Nancy Pelosi, the Democratic speaker of the House, have pledged to hold a vote on a commission package in the “lame-duck” session of Congress, which began on Monday and ends next month.
A promise from Mr Reid and Mr Boehner to hold a vote on a package next year could strengthen the political momentum in favour of a deal on the commission in time for the December 1 deadline, following attacks from both the left and the right on initial recommendations by Mr Bowles and Mr Simpson.
You can see what Bowles and Simpson are trying to pull off. Their report was attacked badly. But if they can get a vote on it or something like it with a Republican House and a more Republican Senate, they can convert it into something that John Boehner can love, at that point garnering enough support from Republicans to pass at least one house. Then Democrats in the Senate can be browbeaten into acceptance on the grounds of having to be “serious” about the deficit. And you can bet that nothing like Domenici-Rivlin’s payroll tax holiday will factor into this scenario.
That’s why the best move is not to play, and to hope the commission collapses under its own weight.




23 Comments

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David good post! Great Analysis
A lot of light needs to be shine on this play by Obama and others.
From day one, a lot of us knew Obama wanted to destroy the democratic house and senate, Obama actions and the actions of other democrats led one to believe that keeping power in the hands of democrats was never their plan. ( all the dems had to do, to stay in power was start infrastructure project all around the USA, just like FDR)
Now everyone should see why Obama pack the catfood commission full of people that hated social security.
Obama knew in 2010, that he would be dealing with a house full of republicans and the plan was also to be dealing with a senate full of republicans. The idea being, Obama could act like, he was saving social security, when he was really killing it, he needed the GOP to play the role of evil doers.
you got to love it when an evil elite plot comes together.
SUN TZU “all war is base on deception”
Progressives we should have saw the writing on the wall very early
OBAMA stops campaign to go save banks
OBAMA continues the BUSH wars
OBAMA passes the Bob Dole Health Care Bill (BILL MAHER and others now say this with ease)
The big news for me was watching Bill Novelli roll out the proposed changes to Social Security under the Rivlin-Domenici plan. If you agree with him that he was there as a private citizen and not as the Director of AARP, I have a bridge I would like to sell you, too.
Rivlin backed off on raising the retire age by further cutting benefits to early retirees. They cut through the COLA and through indexing. Sure they raised the FICA cap to 90% of wages, but our kids would get half of what we will get under their SS formulas.
http://bipartisanpolicy.org/projects/debt-initiative/about
Heh. When Simpson-Bowles came out, I typed it could be worse; they could have proposed a sales tax.
OT- Sorry to go off so early.
Can we call Obama on his position on millionaire tax cuts by publicizing the option to Pass a middle class tax cut through reconciliation?
Let the majority in the house bring up tax cuts for millionaires.
T-
Heh,
At the ground breaking of the new Bush library, GWB quipped that his was a project that was really “shovel ready”.
Things are just ducky, no? Invasive full-body scans to keep Americans scared. Worked for Bush and GOP; will it work for Obama and the GOP? More tax cuts for the rich; and Social Security cuts for the poor and the middle class. The US military has been terrorizing the third world for over a century. Terraists? Check the Pentagon, the CIA and the White House.
Pure crap – I thought Rivlin smarter than she apparently is.
Oh no! Anything but that!
We expect tired and failed laissez-faire from Simpson, for he rubberstamped the entire Reagan/Bush Error.
*Golly, if we cut taxes on the most wealthy prosperity will Trickle Down. And banks, health insurers and oil drillers will, uhm – police themselves! Cut government!*
Bowles by contrast, is just soiling himself here.
– Balkingpoints / www
If anything comes out of this “commission” it’ll be the first time in history one of these things actually led to effective legislation. Nothing is going to change as a result of this.
How about an excise tax on mindless remarks that come out of the mouths of idiot deficit commission members? We be out of debt in about 15 fucking minutes…
Quoting from a poster at CommonDreams
Please, please sacrifice more so that millionaires and billionaires can have bigger estates and more money. Obama once said that he is the only thing standing in the way be tween the pitch forks and the banks. I recommend that he get out of the way next time.
(modnote: no violent imagery.)
David, this is all over the Peterson Press, the Peterson radio, the Peterson internet and is being pushed by the Peterson bought politicians. Denying them access to our minds is a worthy cause; denying their ubiquitous presence and the momentum of their ‘deficit’ mania blitzkrieg is foolish.
We need to stress that much of this so called deficit is due to lowered revenues, and projected healthcare costs due to a private insurance dominated, healthcare industry dominated market. The obscenity of what they are calling for (tax cuts for the rich, loss of safety nets for the poor) does not qualify as a defense against what they are proposing.
This leads me to even moreappreciate Schakowsky’s independent report yesterday. I think this was not easy for her to do. Not perfect but better than this and the Simpson Bowles crap. I hope we traditional Democrats can be unified and vocal in supporting those Democrats who oppose the Obama conservatism and support the interests of the people.
http://my.firedoglake.com/ericlaursene/2010/11/17/schakowskys-deficit-reduction-plan-is-game-changer/
So, the assumption is that if a vote takes place in the lame duck it will be thumbs-down, and they’re already angling for a do-over? Psht.
I cringed last night when I tuned in to the end of an NPR piece, apparently on the deficit. Mara Liasson was saying, “but Pete Peterson is trying to educate the public on the dangers blah, blah,” and gave him a free run of the Hugh Jidett ad.
This was followed by the news that a sponsor was the Joan Kroc fund to support a new generation of reporters for public radio. Sigh.
Good Post!
the cockroaches are clearly in charge
Thanks. Excellent overview. I do think these ethical and mostly lone liberals in a foreign land need to have their views out there and they certainly need our support.
The economic problem is caused by too much sacrifice already by most, and too much avarice by the privileged few.
Let us hope….
NPR tonight had a huge does of Defict Hawks hawking their Cat Food Commission wares. Simpson and Bowles are making the rounds.
Interesting article geared toward Tea Bagger stupidity:
Austerity Measurement: Deficit Reduction, You Asked For It