Obama Debt Commission

Last Thursday morning, President Barack Obama signed an Executive Order creating a Debt Commission, officially entitled the “National Commission on Fiscal Responsibility and Reform”, tasked with making recommendations on how to “cover the cost of all federal programs by 2015.”   Last month, the Senate voted down a similar commission, with liberals against any move that might force spending cuts and conservatives against what they perceived as a way to give cover for tax hikes.

According to the Executive Order, “The Commission is charged with identifying policies to improve the fiscal situation in the medium term and to achieve fiscal sustainability over the long run. Specifically, the Commission shall propose recommendations designed to balance the budget, excluding interest payments on the debt, by 2015.”

The creation of the Commission represents the latest 180-degree turn from Barack Obama’s campaign rhetoric: In September, 2008, when John McCain proposed a commission to study the financial crisis and make recommendations to prevent similar future crises, Barack Obama called the idea “the oldest Washington stunt in the book”, saying it was just a way to “pass the buck” and avoid showing true leadership.
Obama spent much of his pre-signing press conference making statements which had the distinct air of a man desperate to fend off blame and criticism.

He talked about “years of bad habits in Washington” — as if his year in office hasn’t seen the most fiscally irresponsible spending of most Americans’ lifetimes.

He defended the “stimulus” — even though most of the jobs created have been government jobs, temporary jobs, and jobs for foreign “green energy” companies.

He railed against “government that routinely and extravagantly spends more than it takes in” — as if he hasn’t just proposed a pattern of federal budgets which would leave our children with a bankrupt nation.  Indeed it only took him four days after creating the Commission to propose more than a trillion dollars in new spending for his planned government takeover of our health care system.

The Commission’s structure will consist of 18 members, of whom six will be appointed by President Obama. The remaining dozen members will come half from the Senate and half from the House of Representatives, with the Republican and Democratic leader in each chamber choosing three. Obama must appoint at least two Republicans. Presuming he appoints only two, the final balance will be a Democratic majority of 10-8.  It will be co-chaired by former Congressman Alan Simpson (R-WY) and by Erskine Bowles, former Chief of Staff to President Bill Clinton.

Republican leaders remain concerned that the Commission will not make the tough recommendations regarding government spending and reducing the growth of entitlement programs which must be enacted to get our deficits and, more importantly, our debt under control.  Indeed, with 10 Democrats on the Commission, it is easy to imagine the Commission refusing to call for serious entitlement reform or cuts to budgets of the many bloated executive branch departments. 

A spokesman for House Minority Leader John Boehner, who will appoint three Commission members, commented “We still haven’t heard from the President on our proposal to start cutting spending right now.  That doesn’t mean we won’t participate in this commission, but it does indicate that Washington Democrats aren’t serious yet about shutting down their spending binge.” 

Similarly, in a statement on Thursday, Senate Minority Leader Mitch McConnell (R-KY) reemphasized the Republican position: “The American people are deeply concerned by the amount of money politicians in Washington have been spending and they want us to get a handle on spending without raising taxes. After trillions in new and proposed spending, Americans know our problem is not that we tax too little, but that Washington spends too much-that should be the focus of this commission.” There has been speculation regarding whether Senator McConnell, who voted against the Senate’s creation of a similar panel, might refuse to appoint his three Commission members. However, a spokesman for Senator McConnell reached for this article says that “(McConnell) gets three and will appoint three”. 

The Commission’s recommendations must be approved by 14 of its eighteen members, meaning that no recommendation can come out of the panel without the support of at least four of its eight Republicans.  However, Alan Simpson’s position as cat-herder-in-chief increases the likelihood that he will offer support for a recommendation that most conservatives won’t like in return for Democrat support for one or more of his pet ideas. Furthermore, Alan Simpson’s voting history is not one of a rock-solid fiscal conservative. In his last year in the Senate, 1996, Simpson’s National Taxpayer Union rating was 68%, 3 points below the Republican Party average.  The Wall Street Journal’s Steven Moore says that “for Mr. Obama’s purposes, Alan Simpson is a master stroke since he’s likely to commit Republicans to being the tax collectors for Obamanomics.”

Add that to the fact that Obama’s second Republican choice is not likely to be a reliable fiscal conservative and we are left with a situation where a recommendation could effectively pass with the approval of just two of the six Republican members named to the Commission by McConnell and Boehner.

The panel’s structure thus makes the selection of these six Republicans absolutely critical.  If even two of them are not solid fiscal conservatives, the panel could become a rubber stamp for tax hike proposals despite its superficially narrow expected 10-8 partisan gap –an outcome which would prove correct the refusal of Republican Senators to create a similar Congressionally-authorized panel.  As it stands, Congress cannot be forced to act on the Commission’s recommendations but Senator Kent Conrad (D-ND), chairman of the Budget Committee, said he intends to try to force a straight up-or-down vote on the recommendations when they arrive.

The fact that the President formed a Commission which Congress refused to create is shot by Obama at all of Congress, not just Republicans.  To the extent that it gives the appearance of a Congress too spineless to do its job, to take on hard questions, it hurts incumbents of both parties…but the Democrats have far more incumbents.  The Commission’s recommendations do not have force of law but their release will pose a significant challenge to the next Congress.  It’s no wonder that Obama set the Commission’s final report not to be due until December 1, 2010, a convenient few weeks after the upcoming elections.  His Democratic Party is in enough trouble already — in large part due to his exacerbating the very debt and deficit problems he now wants us to believe he cares about fixing.

But the political risk in the eventual vote will likely be greater for Republicans than Democrats if the Commission puts forward recommendations which are sold to the public as a “balance” between spending cuts and tax hikes. If not passed, Republicans will be tarred as reckless obstructionists. If passed, the tax hikes will certainly come to pass and the spending cuts will almost as certainly not. And yet again the big loser will be the American taxpayer thanks to Obama using “the oldest Washington stunt in the book."