A Dollar Is a Dollar, and a Commission Is a Commission

Wed, 25 Jun 2008 14:07:24 +0000

Pete is right to say that deficit hawks should unite, but I don't know if the SAFE Act is enough. It calls for a commission to address:

  1. the unsustainable imbalance between long-term federal spending commitments and projected revenues;
  2. increases in net national savings to provide for domestic investment and economic growth;
  3. the implications of foreign ownership of federally issued debt instruments; and
  4. revision of the budget process to place greater emphasis on long-term fiscal issues.

I agree that within a generation, the cost of our long-term entitlement programs will push our fiscal situation into very dire straits. Our long-term problems will have become short-term problems because we let our current window of opportunity to resolve them close. But the language in the bill does not mention, and the SAFE Commission would only tangentially have anything to say about, the fact that we cannot bring ourselves to balance the on-budget (or non-OASDHI) deficit to zero. And until we do that, or unless the SAFE Commission is explicitly empowered to address that in addition to the long-term entitlements, I think that meaningful reform of long-term entitlements is dead in the water politically.

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Mind you, I do not use the imbalance in the on-budget account as an excuse for sanctioning the growing imbalance in long-term entitlements. But the Left, to whom the size of the long-term entitlement safety net is an important policy objective, is entirely justified in resisting a Commission that ignores the rest of the budget. Had we actually used the Social Security surplus to pre-fund (not just pre-authorize) future Social Security benefits, the task of the Commission would not be so severe. A dollar is a dollar.

Instead, the Left will say, had we not transformed trillions in projected surpluses into trillions in projected deficits, then the outstanding debt of the government a generation from now would be much smaller, and future taxpayers could accommodate more of the projected deficits in the long-term entitlements. A dollar is a dollar.

My disagreement with the Left is that I am more concerned about the intergenerational equity issues here than the intragenerational equity issues. My disagreement with the Left is not that there is some logical inconsistency in the arguments above.

I think Representatives Cooper and Wolf are on the side of the angels here. I just think their Commission needs to be more comprehensive in its mandate than what has been proposed.

For more on these issues, see these Vox Baby classics:

Enjoy!