Commentary: Deficit Commissions Unlikely to Produce Results

On Jan. 26, the Senate rejected an amendment sponsored by Sens. Kent Conrad (D-ND) and Judd Gregg (R-NH) that would have created a bipartisan deficit commission. Due to the complex nature of the proposal, there is a low probability that such a commission would succeed in its goal to slow the growth of the national debt. Despite the improbability of success, there is much speculation that the president will now create a similar deficit commission through executive order.

There is still debate among economists about short- versus long-term federal deficits and their impact on the federal debt. However, there seems to be a growing consensus within Congress that the projected national debt needs to be addressed. One of the solutions put forward as far back as 2007 was a deficit commission proposed by Conrad and Gregg that covers all spending and tax issues. However, progressives argue there is no need for a commission, that debt reduction strategies can be addressed through the regular order of congressional business. Conservatives have wanted a one-sided debt reduction commission, aimed at spending cuts and excluding revenue increases. Others have wanted their particular concern, such as Social Security, off the table in any commission.

The recently rejected Conrad/Gregg commission called for an 18-member panel comprised of eight congressional Democrats, eight congressional Republicans, and two officials from the Obama administration. The commission would have developed proposals to report to Congress. Fourteen out of 18 members would have had to agree on any given proposal before the commission could present the solution to Congress. No lawmaker could amend any of the proposals once submitted to Congress, and each chamber would have to approve a solution with a two-thirds majority. These mathematical hurdles would likely prevent any bills from making it to the president's desk.

OMB Watch opposes these deficit commissions for several reasons. First, they would have Congress abdicate its most essential functions: authorizing spending and levying taxes. Leaving these decisions to non-legislative bodies raises a second concern. The fast-track, non-amendable procedures to consider these recommendations prevent citizens from affecting the shape of legislation that will have enormous consequences for their lives. Finally, while OMB Watch concurs that long-term deficits are not sustainable, short-term deficits in an economy as fragile as ours are actually a good thing. Any responsible approach to debt reduction must sort out the structural problems and address those head-on through the regular business of Congress. However, as demonstrated by President’s Obama proposed three-year freeze on domestic spending (exclusive of Recovery Act funding), there is a tendency among politicians to tackle items with the least potential impact because those tend to be the easiest to address.

Tasking a single commission to look at every possible solution to reducing deficits and bringing back a balanced budget or proposals to reduce the debt is quite a daunting task. Theoretically, the taskforce would have examined everything from reducing mandatory and discretionary spending to raising taxes and reducing tax expenditures. Yet solving the long-term fiscal imbalances of entitlement programs such as Medicare and Social Security could easily necessitate commissions of their own. Committing sitting lawmakers to incorporate those issues into the larger problem of annual budget deficits is a recipe for gridlock.

Requiring 14 out of 18 members of the commission to agree on any one solution further reduced the probability the taskforce would report policy options. In addition, asking two-thirds of both chambers of Congress to agree to any solution without amendment is a sure way to stymie action on difficult policy questions. (See, for example, the health care bills currently stuck in Congress despite large majorities of a single party.)

In the days before the final vote on the amendment, both Republicans – claiming that the commission would be a backdoor approach to raising taxes – and Democrats – arguing the same for cuts to vital entitlement programs like Medicare and Social Security – hammered the proposal. President Obama will face this same environment with the deficit commission he is likely to create. Additionally, an Obama taskforce will not have statutory authority, which means that Congress is not required to take up any of the commission's recommendations. While recommendations from the presidential taskforce will be finalized after the 2010 midterm elections, it would appear that Congress does not have the political courage to make the tough choices that reducing deficits and slowing the growth of the national debt require.