Tag Archives: Erskine Bowles

Who Sits on the Deficit Reduction Committee Will Determine Who Has Won the Debt Ceiling Debate

Bookmark and Share    The pending multifaceted, two staged deal on raising the debt ceiling has received mixed reaction. Those on the left despise the fact that the deal does not include any immediate tax increases, or as they have been defined in this debate, revue increases. Those on the right despise the deal because it does not contain any significant reforms on entitlements and does no go far enough in proposing cuts. Then there are those who have no partisan political allegiances. These are for the most part, the average independent, middle of the road voter. These individuals understand that the proposal’s almost $3 trillion in deficit reduction over a ten year period is really only a drop in the bucket that does little to put a dent into our long term debt and is still not enough to maintain the United States’ AAA credit rating.

While the deal is not yet a done deal, despite conservative angst with the proposal and liberal disgust for the bill, it is more than likely going to pass in the Senate. So ultimately, look for passage of the bill.

That brings up another debate. One that is totally based on political perceptions and asks who won this deficit ceiling debate?

Seeing as how the bill raises our debt ceiling and does not reduce our debt significantly enough, there are no winners. At least not immediately. In fact the lack of immediate results makes us all losers here. But at the same time, it is clear that Republicans have settled on a deal that moves things in their direction. Democrats received none of the tax increases they wanted, they received none of the spending increases they wanted, and they were forced to accept some bitter pills. Some of these pills include the Republicans desire to get Democrats on record with a future vote on a balanced budget amendment and immediate spending caps. Another Republican victory in the proposal that is hard for the left to swallow is the automatic wholesale cut of up to $1.2 trillion that will occur if several terms of this bill are not met by the time Congress goes on their Thanksgiving recess in October.

So it would seem that Republicans have advanced their conservative agenda far more than liberals advanced their socialist agenda. Still, the need to reduce the deficit significantly enough to insure that our debt does not continue to exceed our GDP, has not been achieved.

Solving that problem will require deficit reduction actions that more than double the nearly $3 trillion proposed over the next decade. And that will have to be done in the not so distant future.

In the meantime, while Republicans did not have to compromise as much as Democrats were forced to, they are not yet winners in the debate. That will only be determined in October when the newly created Select Committee on Deficit Reduction proposes the $1.2 trillion in cuts and expense saving reforms that the bill demands. From the Republican perspective, the danger here is that this super committee is not limited to spending cuts and entitlement reforms. It could end up proposing tax increases (revenues). The committee could also shirk its responsibility to significantly reform entitlements, something that will be quite hard to pass the Senate anyway.

Given the flexibility that the Select Committee on Deficit Reduction has, the only way the G.O.P. will have proven that they were successful in this recent deficit ceiling debate will come from what the Select Committee on deficit Reduction comes up with.

The committee is to be comprised of 6 Democrats and 6 Republicans, presumable chosen by the legislative leaders of the perspective political Parties. Boehner and McConnell for Republicans, and President Obama, Harry Reid, and Nancy Pelosi for the Democrats.

The Party leaders will initially consider the usual cast of characters as candidates for this committee. People like Tom Kean, Erskine Bowles, Alan Simpson, Lee Hamilton, Judd Gregg, and other seemingly, now non-partisan, elder statesmen. Now while there may not necessarily be anything wrong with the usual cast of candidates for typical D.C., bureaucratic committees, the crisis we are in is not typical. Our debt crisis is so severe that for the first time in history, military experts warn that it has become a national security crisis. Furthermore; President Obama’s leadership has awakened the nation to just how distinct the political ideologies that divide our nation are. People have come to question what kind of nation America will be. Will we be the type of nation with a government that controls more and more of our lives with greater control, or do we want less spending, less government, and more freedom. Including economic freedom.

The ideological differences have become so divergent, that it is incumbent on the G.O.P. to make sure that the 6 members they choose for the deficit reduction commission are true conservatives who believe in limited government. Any one of those who doesn’t hold true to that belief, can easily defect and give the balance of power to the 6 liberals that Democrats will appoint to that committee.

So who should the G.O.P. appoint to the committee?

The first choice should be House Budget Committee Chairman Paul Ryan.

Ryan is a must. He is a deficit hawk who is reasonable but passionate. He understands the need for entitlement reform, supports a balanced budget amendment, is brave enough to stand against the tide of popular opinion and not looking for anything more than getting the job done.

Another appointment should be Indiana Governor Mitch Daniels.

Daniels has been there and done that when it comes to the budget, deficits, and spending. As Governor, his state has been one of the most economically stable states in the nation and he brings to the table some first hand experience with the excellent built-in, economic structural aspects of the budget process that Indiana has and that the United States would be wise to adopt.

Former Tennessee Fred Thompson is another excellent choice.

Thompson has proven to have a wealth of understanding for our existing problems and a unique down-to-earth and often blunt approach to the problem that can be refreshing.

Other good choices would be individuals who do not come from the often self-contained alternative reality that is Washington, D.C. People who are students of sound economic policy and people who have operated with and successfully crafted budgets that created jobs. The type of people who come from the real world……the private sector. People like Jack Welch, the most studied CEO of the 20th century, who had a successful 41- year career with the General Electric Company, one of the nation’s most preeminent names in the free market. Lawrence Kudlow is another refreshing suggestion. The CEO of Kudlow & Co., LLC, an economic research firm was a chief economist and senior managing director of Bear Stearns & Company, back when Bear Sterns ran things right, he improper workings of the Federal Reserve Bank regarding open market operations and bank supervision. Kudlow is also the host of The Kudlow Report on CNBC.

With the exception of Paul Ryan, there are probably others who would make even better members than those suggested above. These are the type of people who should have a seat at the table that represents the conservative, free market, economic principles which can get us back on track. Without conservative voices who will stand firm on these values, Democrats will wind up being the real winners of this most contentious recent debt ceiling debate.

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