Thursday, July 19, 2012

Seeing through the "Simpson-Bowles consensus"

The much vaunted Bowles-Simpson anti-deficit commission came to no agreement on a plan - but that hasn't stopped the chairmen, corporate Democrat Erskine Bowles and testy former-congressman Alan "Grandpa" Simpson, from using their names to promote a package under the "Simpson-Bowles Commission" brand. It's not a good plan, primarily because it attempts to cap government revenues arbitrarily, cuts Social Security and raises the retirement age.  

While it's not nearly as crackpot or cruel as the "Ryan Plan" pushed by the boyish Ayn Rand acolyte who is a hero of the Tea Party Right, "Simpson-Bowles" is just the kind of "deficit reduction" one would expect from a Democrat from the investment banker wing of the party, allied with a mean-spirited, financially-cushioned-by-a-government-pension old coot who considers the AARP a threat to America and  wants to raise the retirement age for folks who actually have to work hard for a living to 70.

In polite circles where Paul Ryan's Tea Party patent medicine is viewed as a bit too toxic, "Simpson-Bowles" has  become shorthand for some imaginary cross-partisan "consensus" (even though it's rejected emphatically among GOP pols captured by dogmatic anti-tax ideology spread by a spectrum of interests from the Chamber of Commerce to far-right cranks like the "No Tax Increase" Pledge-Master Grover Norquist.)  Typically "deep-thinker" mediocrities like Tom Friedman and David Brooks will both refer to "Simpson Bowles" as the Gold Standard for fiscal strategies moving forward. Even Democratic Minority leader Nancy Pelosi has suggested she "could live with Simpson-Bowles."  This mainstreaming of "Simpson-Bowles" cutting Social Security and arbitrarily limiting government spending in a period when the economy calls for more and our infrastructure is in shambles is a trend that needs to be pushed back.  The proposal being pushed by these two commission appointees is not acceptable.

Ethan Pollack at Economic Policy Institute, who served as a Bowles-Simpson Commission staffer, explains the flaws of the anti-deficit strategy being pushed by the chairmen and embraced by many in the pundit class:
Yesterday, a selection of past members of the Bowles-Simpson commission, anti-deficit groups like the Peterson Foundation and the Committee for a Responsible Federal Budget, and a handful of retired politicians launched the Fix the Debt Campaign in order to push a deficit reduction package in line with the original Bowles-Simpson framework (full disclosure: I served on the Bowles-Simpson commission staff in fall 2010). The event was characterized by high-minded rhetoric about coming together and solving problems and little in the way of specific policies, a reflection of the fact that in the year-and-a-half since its initial release, the Bowles-Simpson proposal has become more a symbol of seriousness and bipartisanship than an actual set of discrete recommendations that can be analyzed.

This is unfortunate because the proposal itself is pretty detailed, and although it has some good components, it also has some major flaws that—without serious revision—should render it an inappropriate template for deficit reduction.

1) It would weaken the economy by cutting way too fast