Fighting over how to fight the debt

The office of Sen. Kent Conrad, D-N.D., sent over a press release today about how the president is throwing his support behind the proposal to create a special task force to deal with the national debt.

Sen. Judd Gregg, R-N.H., the ranking member of the Senate budget committee is a co-sponsor and the other 27 co-sponsors are pretty split between Republicans and Democrats. Conrad is the committee chairman.

Your City Beat was asked to put together a brief story about this, but I couldn't help but do a bit more research.

About that task force

First, here's how this task force would work:

• Its mission would be to come up with recommendations to resolve our estimated $9.9 trillion public debt (according to the White House). Note that this is different from the national debt, which includes private debts. The national debt is estimated at $14.4 trillion.
• Congress would put 16 of its members on the task force and the president would put the treasury secretary and another person of his choosing.
• The task force would not issue any recommendation unless 14 of its members agree. That's 78 percent, much more than a two-thirds supermajority.
• Congress would automatically vote up or down on any recommendation without any chance to amend. The recommendation would become law only there were supermajorities in both houses.

Where we stand

Second, let's consider where our public debt stands in relation to our gross domestic product, which is analogous to national income.

If we're looking at the estimated $9.9 trillion in 2010, it's 67.1 percent. But, since I don't have any data from other countries for comparison, we'll have to use 2008 data. The following is an excerpt from the CIA World Factbook, from highest to lowest:

• 1) Zimbabwe: 265.6 percent.
• 2) Japan: 172.1 percent.
• 3) Lebanon: 160.3 percent.
• 4) Jamaica: 116.3 percent.
• 5) Italy: 105.8 percent.
• 16) France: 68.1 percent.
• 20) Germany: 66 percent.
• 21) Canada: 63.8 percent.
• 35) United Kingdom: 51.8 percent.
• 61) United States: 37.5 percent. (I have no idea why the CIA is using an estimate that White House data sugggests came from 2005. Using the White House data for 2008, which was 40.8 percent, we'd be ranked 51, just behind Costa Rica.)
• 101) China: 15.6 percent.
• 117) Russia: 6.5 percent.
• 122) Estonia: 4.8 percent.
• 123) Azerbaijan: 4.1 percent.
• 124) Libya: 4 percent.
• 125) Oman: 2.8 percent.
• 126) Equatorial Guinea: 0.9 percent. (This is the nation with the lowest debt-to-GDP.)

Note that I included the Top 5; the Bottom 5; members of the G8; and the five biggest economies in the world, which adds China to the list.

So, We're not the worst, but we're not the best either and we're getting worse.

Who's for and against

The task force is noted as being bipartisan, but opposition to it appears to be also bipartisan in some way.

Here's conservative columnist George Will (Yeah, the link is from Canada's National Post. Haha.):

Substantively, the task force would be a means of conscripting Republican participation in huge tax increases. There are precedents. The 1983 Greenspan Commission that "fixed" Social Security permanently (permanence is not what it used to be) involved large and immediate tax increases and small and delayed trims to benefits. The year after the 1990 budget summit, which resulted in President George H.W. Bush's renunciation of his "no new taxes" pledge, the budget deficit almost doubled.

Were the Conrad-Gregg task force to come to a consensus, it almost certainly would be that Congress must make the supposedly "difficult choice" of spending more of other people’s money. Fortunately, the task force probably would be paralyzed by the requirement that its proposals must be endorsed by at least 14 -- 78% -- of its members. Given the difficulty of getting 60% of the Senate to agree on anything important, a 78% consensus on raising taxes and cutting entitlements will be extremely elusive.

So... they'll want to raise your taxes, but they'll never be able to agree to do that, so they won't. Sounds like a sound critique to me!

Here's something from Huffington Post that Michael Moore's Web site re-posted:

On Monday morning, wealthy hedge fund mogul Peter Peterson and his Commission on Budget Reform held a press conference to issue a "Call to Action to Stem the Mounting Federal Debt." Their scary promotional material declares, "The ever-growing federal debt is spiraling out of control. If not addressed . . . Americans could be faced not only with a lower standard of living, but a real fiscal crisis."

Peterson's self-appointed deficit warriors don't really have a plan to cut debt and deficits -- although most of them have a clear record of trying to cut America's meager Social Security and Medicare benefits. But they are selling a dangerous and undemocratic new budget process that would take the responsibility for budget-making away from the president and the committees of Congress and give it to a new commission charged with coming up with a plan to reduce the deficit and then jamming it through Congress on an up or down vote, with little debate and no chance for amendments.

Here's the National Committee to Preserve Social Security and Medicare, or NCPSSM. Watch this ad (via Time Goes By). It says:

Fiscal hawks want cuts to Social Security and Medicare on the legislative fast track, hoping seniors won't know what hit them until it's too late. Legislation now before Congress would create a fast track-style Congressional commission charged with making unprecedented changes in Social Security, Medicare and Medicaid.

Tax increases? Nuh-uh, says the NCPSSM. It's massive benefits cuts that's the threat.

Support is also all over the board.

Here's the Concord Coalition, which is :

"This is a very timely development. Senators Conrad and Gregg are to be congratulated for taking the initiative. There is very little dispute that current fiscal policies are unsustainable and that a serious course correction will require suspension of the partisan trench warfare that has stymied all attempts at finding solutions. Since the regular legislative process has been incapable of dealing with the impending fiscal crisis, a new bipartisan commission makes sense as a method of jump-starting serious consideration of the issues, ” said Concord Coalition executive director Robert L. Bixby.

Of course, they'd say that. Peter Peterson is their founder. Besides being a capitalist scumbag, he used to be commerce secretary under Richard Nixon. A bunch of Dems, including the late Bob Tsongas and Bob Kerrey are also among founders of the coalition, which has the goal of ensuring my grandchildren won't go broke paying for grandpa Tuey's benefits.

Also on board is Alan Green, the former Federal Reserve chairman and Ayn Rand's number one fan.

In Congress, as of this writing, 29 senators are on board as co-sponsors, including 13 Dems, 15 Republicans and one independent.

There were six Republicans who backed out under conservative pressure, including maverick John McCain. On the other hand, newby Republican Sen. Scott Brown, who's supposed to be the bellwether for national sentiment, is saying he's for the task force.

Posted by: Tu-Uyen on 1/25/2010 at 6:26 PM | Comments (9) | Permalink

Tags: budgets and taxes, congress, kent conrad