With its deadline swiftly approaching, the so-called super committee got some bipartisan cover from a respected panel of budget experts on Tuesday. The panelists testified like a quartet of Cassandras, warning the committee against inaction and urging it to consider sweeping changes to the federal government.
"I have great respect for you, individually. Collectively, I'm worried you're going to fail, fail the country." said Erskine Bowles, the former chief of staff for President Clinton and cochair of President Obama's fiscal commission. The experts all also urged the super committee to use consider revenues as part of the bargain, along with significant changes to programs like Medicare, Medicaid, and Social Security. "Without substantial new revenues and entitlement reform, our fiscal ship is destined to capsize," former New Mexico Sen. Pete Domenici, who cochaired a separate budget commission, warned.
Former Wyoming Sen. Alan Simpson, who cochaired the Obama deficit commission along with Bowles, urged the committee members to forget about political fallout and stick to their guns. Recounting battles against the retiree group AARP and what he called "professional veterans," he bragged that he never lost an election as senator. And he saved some particular vitriol for Grover Norquist, the president of Americans Tax Reform, an influential leader in the antitax movement. "If Grover Norquist is the most powerful man in America, he should run for president," Simpson said.
The super committee is supposed to come up with at least $1.2 trillion, and as much as $1.5 trillion, in cuts to the federal debt over the next 10 years. But the panelists urged them to consider much larger cuts, as much as $4 trillion, including overhauls of the tax code and defense spending, as well as Medicare and Medicaid. At a time when many are questioning whether the super committee can deliver on its rather modest task, they urged it to think bigger.
A lack of reliable information about the super committee's dealings has lead to tea leaf-reading by observers. Will the testimony from respected budget experts give the committee the political cover it needs to go with an ambitious approach? Why did the super committee schedule this hearing—right before its approaching Nov. 23 deadline, no less? The questions from super committee members revealed little. Republicans asked the panelists about a premium-support Medicare reform plan, along the lines of what Wisconsin Rep. Paul Ryan proposed and the Republican House passed. It's a nonstarter for Democrats. Meanwhile, Democrats noted that harsh budget cuts in the short-term could harm economic growth, something that all of the panelists agreed with, too.
There is one area where Republicans on the super committee might be willing to consider additional revenues. During the hearing, Texas Rep. Jeb Hensarling, cochair of the committee, asked the panelists whether they favored a so-called "chained" consumer price index, or CPI. All of them did. The chained CPI, discussed but ultimately abandoned during the debt ceiling talks this summer, would slightly trim Social Security cost-of-living benefits while also slowing the rate that income tax brackets rise, so that those on the margins might end up paying more.
Economists claim that a chained CPI is a better measure of how the cost of living rises, but a benefit cut is still a benefit cut. Minutes after the hearing was over, Democratic staffers from the House Ways and Means Committee sent out a release noting that it could mean as much as $560 less each year for a worker by the time they are 75 years old. And even if Democrats were willing to give on that issue, the gains would be paltry, at best. The Congressional Budget Office estimates that a chained CPI could save about $200 billion over the next 10 years. That is a substantial amount of savings, but hardly enough to get them to the finish line.