Close Close

Financial Planning > Tax Planning > Tax Reform

Why Washington Remains Graveyard of Bipartisan Dreams: News Analysis

Your article was successfully shared with the contacts you provided.

Erskine Bowles, the Democratic co-chairman of President Obama’s bipartisan deficit cutting commission, wrote a an op-ed in Friday’s Wall Street Journal titled “Why I’m Optimistic About Cutting the Deficit.”

Bowles, the former chief of staff to President Clinton, wrote: “America will only turn the corner on the debt if both sides come out of their corners to support a balanced plan that gets rid of unnecessary tax expenditures, and keeps the promise of Social Security and Medicare by putting entitlements on a sustainable path for the long haul.”

But on Wednesday—just two days earlier—both sides came out of their corners to resoundingly reject just such a plan when the House of Representatives put to a vote a bill explicitly modeled on the recommendations of his Simpson-Bowles Commission report.

Oddly, Bowles did not acknowledge that the grand bipartisan compromise he has advocated went down in flames with 382 nays to just 38 aye votes, but cited an improving economy, a growing consensus on the importance of deficit reduction and increasing movement toward bipartisanship as reasons for optimism.

If history is a guide, however, the Simpson-Bowles report will go the way of countless blue-ribbon bipartisan commissions before it: Remember President Clinton’s 1993 Bipartisan Commission on Entitlement and Tax Reform that was supposed to fix Medicare and Social Security before they became problems, while addressing tax expenditures like the home mortgage interest deduction that leave vast revenue holes in the budget? That commission, co-chaired by Bowles’ respected, centrist Democrat predecessor John Breaux (along with Republican Bill Thomas) was ignored. Washington is the graveyard of bipartisan dreams.

Bowles says “the terms of the fiscal debate have fundamentally changed” in favor of bipartisanship, but recent budget developments provide a very different indication of the reality of the fiscal debate in Washington.

The Republican-controlled House also put Obama’s own budget proposal to a vote on the same day Simpson-Bowles was crushed. That measure fared even worse, with 414 ‘no’ votes to zero in favor. Apparently no Democrats wanted to be on record in an election year supporting a measure that would see taxes rise by $1.9 trillion. The next day, the GOP-controlled House passed Paul Ryan’s budget, which cuts the growth rate of entitlements while lowering income tax rates, on a strict party-line vote.

Meanwhile, the Democrat-led Senate has taken an opposite tack, not having passed a budget in nearly three years. This is a further indication that Democratic policy preferences to solve budget problems through increased taxation do not currently resonate with the public. Similarly, Ryan’s budget notwithstanding, Republicans have often gotten into electoral trouble for embracing entitlement reform, which Democrats have criticized as ending guarantees the public has relied on.

These recent budget moves illustrate why the Simpson-Bowles bipartisan approach likely has no future: It makes no one happy. It dispenses just enough poison to each side, offering Republicans tax hikes that they think will choke economic growth and handing Democrats entitlement cuts they think will rip up the social contract that underlies contemporary American society.

Despite the pious talk of deficit-cutting centrists about the need to stop kicking the can down the road, a grand compromise will likely elude us until a leader emerges, Democrat or Republican, who can win over a large majority of the public to his vision of our society. FDR and Reagan did that, and it remains to be seen whether the president or his challenger will be able to respond to the economic exigencies of our day, however pressing they may be.


© 2023 ALM Global, LLC, All Rights Reserved. Request academic re-use from All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.