It Always Looked Like Alan Simpson Was a Mistake to Co-Chair a Deficit-Reduction Commission. Now It Looks Like Erskine Bowles Was an Even Bigger Mistake
Numerology is not a science. And there is no reason to think that 21% is a particularly auspicious number.
Matt Miller--like me, part of the sensible, technocratic bipartisan center--looks at what is coming out of the Obama deficit-reduction commission, and is as horrified as I am:
A spending goal too small for aging America: I don't want to overreact. I'd hate to prematurely diss President Obama's National Commission on Fiscal Responsibility and Reform, which held its fourth public meeting Wednesday. But the commission's Democratic co-chair, Erskine Bowles, may have already blown it.... Bowles suggested that the long-term goal the commission should adopt for federal spending should be 21 percent of gross domestic product. This sounds like a bookkeeping matter. But... federal spending under Ronald Reagan averaged 22 percent of GDP. Under Bowles's view, therefore, the outer limits of the Democratic Party's 21st-century aspirations would be to run government at a size smaller than did a 20th-century conservative icon. What's more, Reagan ran government at this size at a time when 76 million baby boomers weren't about to hit their rocking chairs. In 1988, 32 million retirees received Social Security and 33 million were on Medicare, our two biggest domestic programs. By 2020, about 48 million elderly Americans will receive Social Security, and 62 million Americans will be on Medicare (then the numbers really soar).... [Total] health costs in the Reagan era were around 10 percent of GDP, while they're now 17 percent, headed toward 20. Obviously we need a national crusade to make health-care delivery more efficient. But until there's progress on this front, the 21 percent goal would be tantamount to Democrats agreeing that Uncle Sam should handle health care, pensions, defense and little else.
And that's before factoring in the odds that corporate America will come to its senses in a few years and ask government to relieve it of its crazy health-cost burden, at which point the 4 percent of GDP that big companies now spend on health care might sensibly shift to public ledgers....
So what was Bowles thinking?
Perhaps he wasn't....
Let me be clear: I'm all for ending ineffective programs and reallocating the cash; trimming the bloated Pentagon; and reforming tax subsidies for mortgage interest and charitable contributions....
This fall we'll have a phony debate about extending the Bush tax cuts, when it's inevitable that taxes will rise as the boomers age.... If Bowles's Democratic colleagues don't make him walk back his blunder, the great debate this commission should spark about how to marry prudent public finance with America's values and aspirations will be lost before it's even begun.
