The following was originally published at Politico.
"The era of deficit denial is over," crowed former Sen. Alan Simpson, the garrulous co-chair of President Barack Obama’s deficit reduction commission. But the debate about what is to be done has just begun. Simpson likes to describe his position as the center against ideological extremes, reason against the "greediest generation."
Matt Bai in The New York Times Wednesday says Obama must choose between "centrist reformers" and the "traditional liberals," who resist change. But the choice is better described as between a developing Beltway establishment consensus and the vast majority of the Americans.
On jobs, austerity, Social Security and Medicare, tax reform and where to cut spending, most Americans don’t support the proposals of the deficit commission co-chairs, which are echoed in other inside-the-beltway elite reports from the Bipartisan Policy Center and the Pew-Peterson Commission. In fact, popular support for a road to fiscal balance and national revival may be best reflected in a group of liberal responses – laid out by Rep. Jan Schakowsky (D-Ill.), a member of the deficit commission; the Campaign for America’s Future Citizen’s Commission Report, and a detailed plan from three progressive policy groups, Demos, the 21th Century Fund and the Economic Policy Institute.
For example, despite Republican claims of an election mandate to cut spending, polls regularly show that Americans are most concerned about jobs and the economy.
A post-election CBS News poll found 56 percent of Americans thought Congress should focus on jobs and the economy as a top priority. Only 4 percent chose budget deficits as the first order of business. Yet, declaring that "deficits are a cancer," the deficit commission co-chairs are urging rapid surgery.
This position is buttressed by the Republican pledge to cut $100 billion out of domestic programs next year, as well as the president’s commitment to a three-year freeze on domestic discretionary spending and his two-year wage freeze for federal employees.
In contrast, the Citizen’s Commission report gives priority to jobs and growth, calling for deficit-financed jobs programs over the next two years to help put people to work and get the economy going. The Federal Reserve Chairman Ben Bernanke is also calling forg more action to generate jobs.
Polls show that Americans are looking for a clear and bold strategy to revive America’s prospects. A striking two-thirds of the voters who swept Democrats out of office approved of a hypothetical post-election statement by the president calling for building a new foundation for the economy, investing in areas vital for our future and arguing that reducing our deficits is "not enough," according to an election-night poll sponsored by the Campaign for America’s Future and Democracy Corps.
Yet Bai’s "centrist reformers" make balancing our books the overriding goal of economic policy, painting a fearful picture of an America on the verge of collapse, akin to Greece or Ireland at the mercy of capricious investors. But this hysteria is misplaced, as the Citizen’s Commission report shows. Deficits – and long term debt driven by out-of-control health care costs – are a concern. But the real problem is an economy in decline. The report calls for making vital investments in a new foundation for the economy, even as we bring deficits under control.
Polls show more than two-thirds of Americans – right, left and center – oppose raising the retirement age or cutting Social Security or Medicare benefits. In a Stan Greenberg election poll, 68 percent called on politicians to keep their hands off Social Security and Medicare, over accepting that deficits might require raising the retirement age.
Yet the commission co-chairs and the other establishment reports call for raising the retirement age, cutting Social Security benefits and raising Medicare premiums — moving it closer to a voucher program.
In contrast, the progressive plans note that Social Security hasn’t contributed to the deficits, and oppose increases in retirement age or cuts in benefits. While our long-term debt problem stems almost entirely from soaring health care costs, the problem isn’t Medicare. It is a broken health care system. They urge reforms to contain costs across the system, including negotiating bulk discounts on prescription drugs and even moving to a Medicare-for-all system if needed.
Polls reveal that the public is wary about taxes. Americans divide on a carbon tax on utilities, balk at raising the gas tax and overwhelmingly oppose a federal sales tax. Majorities support letting the Bush tax breaks lapse on incomes that are more than $250,000. Asked to choose between higher taxes on the rich and a national sales tax, by 54 percent to 31 percent, Americans favored taxing the rich over a sales tax.
Yet the co-chairs’ report features tax reforms that lower rates across the board, while removing various tax expenditures favored by the middle class — including the mortgage deduction. The Bipartisan Policy Commission task force adds a regressive 6.5 percent "deficit reduction sales tax." The liberal alternatives call for raising taxes on wealthy, and argue for taxing "what we need less of" — like carbon emissions and financial speculation.
Polls based on budget-cutting exercises show that when Americans are forced to make choices, most choose greater cuts from defense, while trying to protect spending on education and the environment. The co-chairs would cut domestic spending and defense at the same rate. The liberal alternatives would take more from the defense budget while expanding investments in areas vital to our economy, from education to infrastructure to research and development.
Ironically, the position that best reflects popular support is the president’s own vision, articulated in his Georgetown remarks, that we must build a new foundation for the U.S. economy.
The choice is not, as Simpson and Bai would suggest, between centrist reforms and liberals who resist needed change. The choice is between a cribbed beltway consensus at odds with most Americans, and the fresh vision of fundamental reforms needed to revive America’s prospects – a vision once best described by the president himself.