Erick reported last week that a lame duck Congressional session is all but certain. Here is why he’s right, and where things seem to be headed.
The Obama deficit commission is set to make its report on December 1. The commissioners have been meeting about once a month since the commission took form, but they are still reportedly “studying the problem.” Staff is obviously working, but at this point, it seems that a lot of the commissioners are putting together their own laundry lists of what could be done, whether its discretionary cuts, entitlement reforms, or tax increases. This is basically all a slow-walk until after the November election, at which point the Obama appointees and the commissioners who want to pass something can figure out what the political landscape is.
Here is what we know. Sen. Judd Gregg has reportedly opined that the deficit commission could produce a bipartisan, “historic” package on par with Obamacare. Gregg and former Clinton OMB director, Alice Rivlin, are in charge of of the Social Security portion of the report. Remember that Gregg is also a top lieutenant of Minority Leader Mitch McConnell. McConnell, for his part, has also been telling people, including Fred Barnes, that he expects the commission to produce something that a bipartisan majority can coalesce around. However, such talk of a “historic” and “bipartisan” report in the midst of a lame duck session is deeply unsettling.
There seems to be an expectation that a deal would likely be some amalgamation of discretionary cuts and a deal on Social Security, which fits with the Gregg “historic” adjective. Since there is no conceivable way that Democrats would accept personal accounts in Social Security, already this is a lose, lose scenario for conservatives where the commissioners are headed toward the dead-end cul de sac of “solvency,” i.e. making the Social Security Trust Fund’s numbers (the Trust Fund is an accounting fiction rigged to hide the fact Social Security contributions are spent on government largesse) add up on a spreadsheet. Republicans would get some reductions in Social Security benefits, presumably a hike in the retirement age or “indexing” where benefits are adjusted to grow at a slower level. Democrats would get tax increases (since there is no way that they would agree to benefit “cuts” without them), presumably a lift in the payroll tax cap or some other tax increase within Social Security. This is basically similar to a 1983 compromise that sprang out of a commission led by Alan Greenspan.
Here is the problem. Republicans would be doing absolutely nothing to inject freedom into the Social Security system. Instead, of allowing people to direct a portion of their taxes into their own personal accounts, that they own, Republicans would be complicit in raising Social Security taxes to balance out the system. And if the payroll tax cap is lifted on those with higher incomes, it is going to severely impact many job creators and further depress economic growth and heighten unemployment.
Essentially, one of the holy grails of conservative, limited government entitlement reform would simply be thrown overboard in order to get a bipartisan, “historic” deal to make politicians feel good about themselves, when a month later the Congress is likely to be more conservative (if not, completely in Republican hands). This is not entitlement reform on our terms, and it is not entitlement reform that we should accept.
All that to say, we need to be concerned, very concerned about any deficit commission, and any lame duck that allows Congress to consider its recommendations. And we need to make the prospect of a lame duck a liability for candidates now.