June 24, 2008


Hearing on the SAFE Commission Act and the Long-Term Fiscal Challenge
House Committee on the Budget

Mr. Chairman and Mr. Ryan, thank you for inviting me to testify today. My testimony will focus primarily on the general question of whether a “budget commission” would be useful at this point as a way to address the serious long-term fiscal problems the nation faces. I would like to make three principal observations.

First, the Center on Budget and Policy Priorities agrees with the many analyses showing that, if current policies are not changed, the projected mismatch between expenditures and the revenues to pay for them will grow over time and eventually lead to a debt explosion. This cannot be permitted.

Second, we agree that policymakers should start soon to reduce this long-term mismatch.

Third, we do not believe that a law establishing a commission is advisable, at least not now. I say this based on experience as someone who served as a member of the Kerrey-Danforth Commission on deficit reduction in 1994. Unless the next President and the bipartisan leadership of the House and Senate are committed to considering both program reductions and tax increases to achieve deficit reduction — and to working out compromises on these matters — any commission will fail and be a waste of time and money. A commission will only work — as with the 1982-1983 Greenspan commission — when the President and Congressional leaders decide to work out a bipartisan compromise and use commission members as their negotiators. Moreover, if the President and the Congressional leadership are willing to commit to negotiate a package of program reductions and revenue increases, a commission is not really necessary — political leaders can go straight to the substantive negotiations themselves, as they did in 1990 and 1997, without convening a commission. To be sure, they may decide that a commission would provide a useful forum for negotiating an agreement and educating the public about its importance and desirability. But that is a decision that can only be made if the President and Congressional leaders have reached a consensus that serious negotiations are desirable. And, if so, a commission could be convened without legislative action, as was done in 1982-1983.

The key point is that a commission will not force a consensus — or a willingness to negotiate a bipartisan agreement — where one is lacking on the part of the President and Congressional leaders. That is why the 1994 Kerrey-Danforth commission on entitlement and tax reform failed.

I would add that the base-closing commission does not offer a counter-example. There, the President and bipartisan Congressional leadership agreed that the nation had too many bases and some needed to be closed. The commission was designed to implement that agreement by providing a way to surmount parochial geographic concerns that could otherwise block action. But bipartisan consensus on the need to close bases had already been reached.

I would like to elaborate now on these three points, with special emphasis on the third.

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