The latest version of a compromise takes us to a very familiar place. Essentially, we are postponing the tough choices, and returning to the notion of a bipartisan debt commission to impose some kind of long-term adjustment to taxes and spending that will help us avert fiscal catastrophe. All we're getting is a short term trillion dollars of cuts to raise the debt ceiling, and all that remains is how to ensure that the future commission's recommendations will be passed by the Congress.
And so the trigger. My view is that it should put real pressure on both sides. Some kind of tax hike on the successful should be included in the trigger if the commission's recommendations are not accepted. That – and that alone – puts pressure on the GOP to accept a big tax/spending Grand Bargain. For the same reason, I think cross-the-board entitlement cuts, raising of the retirement age and means-testing should also be in the trigger to force Democratic approval.
So much of this sounds exactly like what was promised long ago when Obama set up the Bowles-Simpson commission but failed to find a viable enforcing mechanism. What made that impossible was the Republican insistence on no new revenue sources at all. And that strikes me, alas, as still unresolved. I find it hard to believe that a serious bipartisan committee will not include some revenue increases, given the gravity of the crisis. And I cannot believe the current GOP, emboldened by its success in re-setting the debate, will be able to endorse that, especially if the alternative is only mandated entitlement cuts. Mandated tax hikes and defense cuts, in other words, must be in the trigger to avoid a replay of this any time soon. And the commission should be forced to report in six months.
If I may be allowed a smidgen of hope, it would amount to this. Despite vast polarization, and the most extremist GOP since the 1930s, the system has forced some kind of way forward. No one, in my view, comes off very well. Obama failed to grasp Bowles-Simpson and take the initiative in January. The Republicans have been spectacularly dogmatic over revenues, even when no sane person can really believe they are irrelevant to a solution that can command majority support. The bulk of the blame lies with the GOP, but Obama's excessive caution bears some responsibility as well.
They all failed. But there is still a chance that America can succeed in tackling this crisis. The question, to my mind, is whether the GOP nominee will run against such a deal or in favor of it. And if the campaign will be about the Grand Bargain or the options beyond it.
The Dish 