July 10, 2014 SIGN IN | REGISTER

Deficit Panel Could Change Economic World

But Portman, and perhaps Reps. Dave Camp (R-Mich.) and Fred Upton (R-Mich.) and Sen. Chuck Grassley (R-Iowa), has to realize that we are now playing not with fire, not just with live ammunition, not even with real grenades, but with nuclear weapons. Failure to act in a strong and bold way could risk a depression that could last for years. The super committee may well have the fate of the world in its hands — and a solution is there for the taking.

What is it? It starts with the template that every bipartisan group inside and outside Congress has come up with: $4 trillion overall in deficit reduction over 10 years including major tax reform which lowers rates and adds about  $1 trillion, a fourth of the overall package, in revenues.  Combine that with a version of the president’s jobs program for the near term,  and we have it.

Imagine if that kind of package got adopted by the super committee, especially by a vote of say, 10-2 or 9-3 — enough of a margin to enable it to survive its otherwise dicey prospects in the House, and likely to sail through the Senate. (Note to Sen. Jim DeMint (R-S.C.): no filibuster or other delay tactics allowed.)

The shock to conventional wisdom would be immense. Likely, U.S. markets would soar and there would be a comparable reaction abroad. It could actually provide enough of a positive shock to the system that it would change domestic and international consumer and business psychology, providing a major positive effect on the global economy.

Can all this be done by Nov. 23? Actually, the tax reform package can be put together pretty quickly, if the base-broadening is done by setting deduction limits rather than picking out winners and losers among the popular deductions.

If I had my druthers, I would opt for providing even deeper cuts in rates by adding a kind of consumption tax advocated by the Domenici-Rivlin Bipartisan Policy Center commission. There are many ways to restrain the growth curves of Social Security and Medicare without hitting core benefits for most recipients. Raising the Medicare age to 67 is feasible — but only if the Affordable Care Act is in place, providing alternative health insurance options for older Americans caught without jobs or Medicare.

None of this is easy. Doing it requires unnatural acts for politicians driven by the contemporary frenzy of our tribal politics. But success could make history for people such as Portman, Kerry, Camp and Upton.

So here is my question for all of you: Why are you there, if not to make history and improve the lives of Americans? You all have a rare, maybe unprecedented chance to do something remarkable. Don’t blow it.

Norman Ornstein is a resident fellow at the American Enterprise Institute.

comments powered by Disqus

SIGN IN




OR

SUBSCRIBE

Want Roll Call on your doorstep?