Other papers say: Don't let talks shortchange debt reduction
Sunday, December 9, 2012
This editorial appeared in Wednesday's Washington Post:
Having denounced as "silliness" President Obama's plan for a budget deal to avoid the "fiscal cliff," House Speaker John A. Boehner, R-Ohio, has countered with a proposal of his own. It didn't take long for Mr. Obama to shoot it down: "Still out of balance" was his dismissive description in an interview Tuesday with Bloomberg TV. A Republican concession on higher tax rates for the top 2 percent of earners is still the president's sine qua non for a deal; Republicans "will not agree to" that, Mr. Boehner and his fellow House leaders insisted Monday in a letter to Mr. Obama.
So we're headed for $600 billion worth of tax increases and federal spending cuts next month, right? Certainly the political rhetoric is not encouraging. Nor is the substance of Mr. Boehner's counteroffer. On taxes, the speaker promised to raise $800 billion over 10 years — but only by eliminating "special-interest loopholes and deductions," which he refused to name.
Mr. Boehner would cut $600 billion in medical entitlement spending, $300 billion in other entitlements and $300 billion in discretionary outlays — numbers that he suggested are based on ideas raised in congressional testimony a year ago by Erskine Bowles, a former co-chair of the national deficit reduction commission. The reference to Mr. Bowles' recommendation also would imply applying a new inflation adjustment to federal taxes and benefits, yielding $200 billion in savings, and a gradual increase in the Medicare eligibility age. There were few specifics otherwise.
Still, Mr. Boehner has publicly put his name on something that can loosely be called a plan. His letter to the president is the first time we know of that he has committed, publicly — as opposed to behind closed doors in last year's abortive debt-reduction talks — to raising taxes, not just raising revenue through economic growth. This is progress — forced by the GOP's election defeat in November and the White House's subsequent pounding on Republicans over their refusal to demand more taxes from upper-income Americans.
What's worrisome, though, is that the two sides are slipping into a kind of tacit agreement to scale back the size of an ultimate debt-reduction package. The president billed his plan as $4.4 trillion worth of debt reduction over 10 years. But $2.4 trillion of that comes from lower interest payments, alleged savings from winding down overseas wars Mr. Obama never planned to fight and discretionary cuts that were legislated a year ago. Mr. Boehner's letter similarly identifies only $2.2 trillion of new revenues and cuts.
It will take more than that to dent the debt. A new report from a Bipartisan Policy Center task force headed by former Sen. Pete Domenici, a Republican, and former budget director Alice Rivlin, a Democrat, suggests that it would take $2.8 trillion in fresh cuts and revenue to stabilize the debt at 69 percent of gross domestic product by 2022 — above historical levels but sustainable. It would appear that Republicans and Democrats must not only come together but also raise their sights.