Does anyone believe that President Obama would have proposed a two-year pay freeze for federal workers absent the prod of the Republican takeover of the House? Let’s just hope this small first step toward fiscal prudence isn’t the last.
Too gloomy? Maybe, but the political balance of power warrants pessimism. Both Democrats and Republicans — and, of course, especially the latter — may have campaigned on shrinking the federal deficit, but their prospects for success in a divided Congress are decidedly dim.
And as The New York Times’ David Brooks noted last week, the fault belongs to both sides. “Liberal Democrats show no sign of accepting significant spending cuts to the programs they regard as their movement’s greatest achievements,” he wrote, while “almost no Republican seems willing to accept tax increases as part of a bipartisan budget deal.”
In fact, Brooks maintained, “You could offer Republicans a deal that was 80 percent spending cuts and 20 percent tax increases and they’d say no. They’d say no to 90-10, too.”
I put this proposition to congressmen Mike Coffman and Doug Lamborn. Would Colorado’s two GOP lawmakers (until January, when they’ll be joined by two more) really turn down a deficit-reduction deal weighted four to one in favor of spending restraint?
In a word, yes.
“We’ve increased non-defense discretionary spending at a breathtaking pace,” Coffman told me, “and I’m not interested in chasing that with increased revenues.”
If you count stimulus spending, Coffman noted, non-defense discretionary spending has soared by 84 percent in just two years. Even without the stimulus, it increased by 28 percent.
“I just think we have a spending problem, not a revenue problem,” he says, a sentiment that Lamborn independently echoed.
“I oppose any tax increases because historically any gains in revenue are simply too tempting for lawmakers to spend instead of paying down the debt,” Lamborn said, “and the result is more spending than before.”
Coffman and Lamborn are surely correct that spending is the overriding problem. And their fear that more tax revenues will simply foster more spending is understandable, too. But it’s still shortsighted to rule out all tax hikes if the tradeoff is: A) significantly lower tax rates (by shrinking deductions, for example); or B) structural reform that otherwise would never be achieved.
For an example of the second type of tradeoff, consider Social Security. Last month, the chairmen of the president’s panel on reducing the national debt — former Republican Sen. Alan Simpson and Erskine Bowles, former chief of staff for President Clinton — released a proposal to put Social Security on a sound footing that ought to intrigue fiscal conservatives. Although the plan includes raising the cap on taxable income, nearly two-thirds of the savings involves adjustments in benefits (by trimming future payments to high earners, tweaking the cost-of-living index and linking the retirement age to average life expectancy).
It’s hardly a perfect plan, but it provides a basis for compromise between liberals and conservatives that protects low-income workers and yet slows spending growth.
If a Social Security reform weighted 2 to 1 in favor of spending restraint isn’t good enough for conservatives, what would be? After all, “there is ample historical reason for skepticism that Social Security reform will ever happen on a party-line vote,” notes Charles Blahous, a Social Security trustee. “We will thus either have a bipartisan solution or we will face exploding cost growth over the next few decades.”
Liberals dedicated to growing government may not be bothered by “exploding cost growth,” but Coffman and Lamborn undoubtedly are. Which is why they should be open to a deal — before it’s too late.
E-mail Vincent Carroll at vcarroll@denverpost.com.
