Washington obviously needs to have a serious debate about truly putting our nation back on a path toward fiscal responsibility.
We’ve argued for this debate for months now, and are encouraged by a pair of developments.
Earlier this year, President Barack Obama formed a bipartisan panel of experts to study solutions to structural problems with federal revenue and spending. While the group conveniently won’t report back to the president until after Election Day, its creation is a good start.
And last week, Republican leaders, hoping to woo back American voters, released their Pledge to America, a blueprint to right the fiscal ship. The GOP solicited ideas from constituents for several weeks in preparing the document, which harkens back to its 1994 Contract with America.
Unfortunately, the new contract is heavier on symbolic fixes than on direct approaches to trimming entitlements, and it leaves open the question of how deficits would be controlled if the Bush tax cuts were made permanent.
The Pledge’s first order of business focuses, predictably, on the economy and job creation.
Republicans want to root out policies they view as job killers. They want to extend the Bush administration’s tax cuts and settle the annual problem of dealing with the Alternative Minimum Tax.
GOP leaders, however, need to provide a fuller answer for where government should cut to balance the books if the tax cuts are extended.
The Pledge does begin the process by seeking to roll back government spending to pre-bailout and pre-stimulus levels. Republicans say it would save an estimated $100 billion in its first year and help pay down the $13.4 trillion in federal debt.
Sounds good to us.
However, they then take it a step too far as they try to tap into populist anger over bailouts. The Pledge would forbid future bailouts and cancel the successful Troubled Asset Relief Program.
The idea is to keep taxpayer money from being used to “reward” irresponsible financial risks. But TARP helped stabilize the economy when financial markets were frozen and the Wall Street firms that were “bailed out” are actually paying back the loans with interest.
And why unnecessarily tie lawmakers’ hands if they need that flexibility in the future? Our economic future is by nature uncertain, and elected officials ought to have tools available to prevent catastrophe if possible.
The Pledge also would “repeal and replace” the health care reform law that has been Obama’s signature accomplishment. Here, too, we understand the frustration with how the reform package was handled by Congress and the legislation’s failure to bring down costs in substantial ways. But we think reforming the reform is easier than scrapping that plan and starting over.
Republicans will need to provide more details if they take back Washington, but at least the debate has begun.
