Anti-Deficit Duo Simpson and Bowles: Trying to Save Us From Fiscal Ruin

BOSTON -- Did you know that our government only has enough money to pay for Social Security, Medicare and Medicaid? That we borrow to pay for education, defense, roads, research and absolutely everything else? That $920 billion of the money we borrow comes from China? That if we continued on autopilot, by 2020 we would be paying $1 trillion a year in interest on our debt?

These startling statistics were presented by Alan Simpson and Erskine Bowles, co-chairmen of the Bipartisan Commission on Fiscal Responsibility and Reform, at a governors meeting here Sunday. The grim numbers were only slightly less alarming than the political picture – ideologues without facts, partisans without flexibility, and a commission without much authority to force hard choices on the nation and its leaders.

Simpson, the former senator from Wyoming, made the whole venture sound like something out of the Wild West, danger lurking in every dusty town and saloon. "Erskine and I travel only as a pair," he said. "We ride shotgun on each other. It's a lonely life out there in hostile territory."

The men at the helm of the deficit commission, to drastically understate it, have completely different styles. Simpson, a Republican with a libertarian bent, is given to free-wheeling remarks and humor that cuts to the bone. Democrat Bowles, a former White House chief of staff who now heads the University of North Carolina, looks and talks like a very earnest professor or the investment banker he once was.

In their hands could lie the fate of the nation. At the end of the year, the 18-member commission established by President Barack Obama will issue recommendations for containing skyrocketing annual deficits and cumulative debt. Congress is not required to take up its recommendations, but congressional leaders have agreed to hold votes on items endorsed by 14 members. "We have baby teeth, which is better than no teeth at all, I guess," Bowles said.

Can anything win backing from 14 people? The answer depends on whether commission members, especially the dozen in Congress, will be able to transcend pressure from people who are unalterably opposed to spending cuts on the one hand, or tax increases on the other.

The GOP is so dug in on taxes that most candidates sign no-tax pledges, and six GOP senators voted against their own deficit commission bill this year out of fear the panel would suggest tax increases. Sen. Jon Kyl of Arizona set off Democrats this week when he said on "Fox News Sunday" that an extension of jobless benefits had to be offset with spending cuts elsewhere, but that was not necessary when it came to extending tax cuts for the wealthy ($678 billion over 10 years). "You should never have to offset the cost of a deliberate decision to reduce tax rates on Americans," he said.

The militance about taxes began to escalate steeply after George H.W. Bush vowed at the 1988 convention, "Read my lips: no new taxes." Two years later, Republicans turned on him for accepting a deficit-reduction deal that included higher taxes. Two years after that, he lost his re-election bid.

Before Bush, raising taxes did not seem to be fatal for GOP candidates or presidents. Simpson called it a "flashword" in today's deficit debate and pointedly condemned revisionist history by conservatives. The other day, he told the governors, "One of the great zealots of our time was talking about his favorite anti-tax president, Ronald Reagan." He said he informed the man that Reagan had signed four large tax increases and seven lesser ones: "A total of $132 billion in tax increases under those eight years, and why? To make the government run."

Bowles tried to be reassuring about the concerns of liberals even as he talked about the severity of the cutbacks that will be required. He will not sign off on anything, he said, that harms the disadvantaged. He also said commission proposals would not cut government spending amid "a truly very fragile economic recovery." Its recommendations would take effect 18 months away in 2012, Bowles said, enough time for the recovery to "gain a foothold." When the government does start taking serious steps to balance the budget, he added, it should continue to invest in education, infrastructure and innovative research.

Where will the changes come? Bowles said Obama has made clear in public and in private meetings with him and Simpson that next year he will propose real reductions in the cost of entitlements. Bowles predicted cuts in military spending -- "We don't have to be the world's global policeman or get involved in nation building." He talked about a simplified tax code that would "close the tax gap" between what we take in and what we spend. Maybe a more standardized Medicaid program that offers poor people basic health care services but nothing fancy. Simpson said the new universal health-care law – which doesn't take full effect until 2014 -- is also on the table.

The governors, in town for a National Governors Association meeting, wondered why the feds can't be as fiscally responsible as they must be. Where's the urgency? asked Gov. Joe Manchin of West Virginia. Bowles likened the problem to a slow-moving cancer, destroying the country from within. We could do nothing and possibly survive for five years. "This is the most predictable economic crisis in history," he said, but Congress often doesn't act until a crisis is on its doorstep.

The Simpson-Bowles road show is like a buddy movie for wonks. They play wry, honest brokers on a mission to nudge a thankless nation off the road to fiscal ruin. The routine left a paradoxical impression. "If it's possible to tell us how bad things are and make us feel good about it, I think both of you two have done it," Gov. Mike Beebe of Arkansas told them.

This after Simpson rated the odds of success "rather harrowing" and lamented that "there are many who hope we will fail. I can tell you, we've met 'em all."

That may not be quite right. Almost everyone wants the commission to succeed. They just want success to be achieved on their particular terms, be it zero tolerance for major spending cuts or zero tolerance for any tax hikes at all. Therein lies the chasm, and those harrowing odds.