The president's new 'debt commission' explained

House Budget Committee Chairman Rep. Paul Ryan penned an op-ed in the Wall Street Journal this morning saying that the GOP accurately called President Obama's bluff on the debt-limit negotiations. The Congressman makes his claim not as a means to gloat about victory after the divisive political spectacle that was the debt-limit debate, but to warn the public of the disturbing behavior Democrats have displayed when approaching the debt:

"Nevertheless, the President still hasn't shown us his cards. He still hasn't put forward a credible plan to tackle the threat of ever-rising spending and debt, and his evasiveness is emblematic of the party he leads.

Ever since they abused the budget process to jam their health-care takeover through Congress last year, the Democrats have simply done away with serious budgeting altogether. The simplest explanation—and the president's real bluff—is that they don't want to commit publicly to the kind of tax increases and health-care rationing that would be required to sustain their archaic vision of government."

Rep. Ryan goes on to criticize the President for presenting speeches rather than specific numbers and projections to approach the debt, and the failure of the Democrat-controlled Senate to pass any budget at all over the last two years.

"The president tried to use the debt-ceiling negotiations to secure the first of many tax increases that his party needs to pay for its legacy of unfunded promises. He failed. Instead, Republicans won the policy debate by securing the first of many spending restraints we need to avoid a debt-driven economic calamity."

While the debt deal provided an immediate $917 billion cut in federal spending after the government's borrowing limit was raised by $2.4 trillion, the up to $1.5 trillion bulk in deficit reductions rely on the plan produced by a bipartisan committee or "super congress" as it has been dubbed. Their plan has the authority, and if passed could use tax increases and cuts in safety-net programs to pay for the long-term $1.5 trillion reduction. While many conservatives fear that Democrats will use this committee as a means to get the revenue increases they feel were supposed to be central to raising the debt-limit, Rep. Ryan seemed confident in an interview with Sean Hannity Monday that tax increases will remain off the table:

"We're not going to put those kind of people on this committee, that are going to, you know, go for a tax increase, number one. Number two, it couldn't pass the House even if they tried. Number three, the baseline they used, the measuring stick that they use for this committee, makes it really basically impossible to raise taxes, because to raise taxes and get credit for it in this committee, you would have to commit a $3.5 trillion tax increase. The Bush tax cuts go away, the alternative minimum tax kicks in. You wouldn't get credit for any of that. And then you'd have to raise taxes on top of that, that's why we think tax increases are a nonstarter."

The last time a bipartisan committee was assembled by the President and Congress to look at the debt both Houses of Congress largely dismissed the committee's findings. Republican Alan K. Simpson and Democrat Erskine Bowles were appointed by the President in February 2010 to head the National Commission on Fiscal Responsibility and Reform to find ways to reduce the mounting federal debt. Like the upcoming bipartisan committee to ink out the remaining deficit reductions in 2011, the 2010 Commission consisted of 3 Congressman and 3 Senators from each party, including Rep. Ryan.

In November 2010 the Commission put out their plan that called for deep cuts in domestic and military spending starting in 2012, an overhaul of the tax code, eliminating or reducing the $1 trillion a year in popular tax breaks for individuals and corporations, using the revenues mostly to slash income tax rates but also to reduce deficits, and to make Social Security solvent for 75 years by raising payroll taxes for the affluent and slowly raising the retirement age for full benefits to 69 from 67 by 2075. They said the plan would reduce deficit spending by about $4 trillion over the coming decade. The bill was largely opposed by congressional Democrats and Republicans, including all three Republicans on the commission.

Bowles and Simpson published an op-ed in the New York Times this morning, "A Crisis Merely Postponed," which warned of incoming drama despite taking "an important first step toward fiscal sanity."

"The problem with the plan is that it’s just a step forward; it isn’t a solution. It leaves more than half of its work — finding at least $1.2 trillion in savings to avert an automatic set of cuts — to a new bipartisan Congressional committee. Even if that committee is successful, more tough work will be necessary to avoid, a few years down the road, another crisis over the deficit."

Bowles and Simpson reaffirm that the country needs a plan to reduce our deficits by no less than $4 trillion in the next decade, addressing our unsustainable growth in entitle programs and tax code in need of reform. They believe that the bipartisan committee must take on “big ticket” items — Medicare, Medicaid, Social Security solvency and tax reform to produce new revenue through reducing or eliminating tax breaks, not raising rates.

Both sides of the political spectrum seem to agree that the bill passed to raise the debt limit this week left much to be desired. As the cool breeze comes in and leaves change, we could be facing the calm before another very vicious political storm over the $1.5 trillion in deficit reductions still owed to the American people.