"I have great respect for each of you individually, but collectively I'm worried that you're going to fail -- fail the country," former Bill Clinton chief of staff Erskine Bowles said last week to the 12-member joint congressional supercommittee tasked with cutting the federal deficit by some $1.2 trillion over 10 years.
The safe money in Washington is betting on failure. On Monday, Sen. Chuck Schumer, D-N.Y., predicted that the supercommittee will fail, and he blamed Republicans for a failure that has yet to occur. Apparently, Schumer represents the branch of the Democratic Party that cares more about blaming the GOP than it does about doing something about the deficit.
There are Democrats -- and Republicans -- who understand the high stakes involved. Last week, Reps. Heath Shuler, D-N.C., and Mike Simpson, R-Idaho, joined 98 other House members in a letter that urged the supercommittee to go big -- to shave $4 trillion off the deficit. The letter noted that "all options for mandatory and discretionary spending and revenues must be on the table" -- which Washington took as a green light for tax increases.
Now, I don't understand why House members would push for a $4 trillion package when insiders think the $1.2 trillion plan won't fly -- other than to grandstand. But I have to agree that at the end of the day, serious deficit reduction will have to include both spending cuts and revenue increases -- although better to put off serious revenue increases until the economic recovery is solid.
Note: Revenue increases aren't necessarily tax increases. Congress could raise revenue by eliminating tax breaks. As Simpson told Fox News, "nobody is in favor of increasing tax rates. But we are in favor of increasing revenue."
At a GOP debate last summer, all the GOP presidential candidates raised their hands when asked whether they would reject a deficit reduction package composed of $1 in tax increases for every $10 in spending cuts. Rep. Ron Paul, R-Texas, was one of them.
So I was surprised to see that Paul had signed the Shuler-Simpson letter. I called Paul's office to find out more. His office responded with a statement that said Paul had "signed the letter because he believes the super committee needs to hear from both sides that cutting spending is gravely important. Revenues are part of that equation, and while Congressman Paul is not willing to raise taxes he is willing to consider any major tax reform proposals that could simplify the code and reduce compliance costs." That works with Simpson's distinction.
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