OPINION: How we can force a real long-term deficit-reduction solution

The complex forces that dominate and affect a significant budget fight are often not obvious and are usually not stated. What you see and what is said is largely political misdirection.

Like an iceberg, only a small part of the exercise is visible. This applies especially to the politics of the effort, although the actual numbers being used are often equally opaque.

The president says he wants a big approach, one where “we eat our peas.” This would involve reducing the deficit and thus the debt over the next 10 years by $4 trillion. It is a big number, but it should be noted that the debt over that time will go up by more than $11 trillion. Thus the debt will continue to rise, even with this significant reduction, at a historically large and unsustainable rate.

The Speaker, it is represented, originally agreed to this $4 trillion as a target.  He then returned to his caucus and determined that because that number would include potentially $1 trillion in new revenue, his people would not support the effort. Thus, the Speaker has now proposed a much more modest approach of taking a reduction of $1 trillion to $2 trillion, all in spending cuts and interest savings.

This approach, if successful, assures there will be more debt-ceiling votes and soon, as in before the next election. The president’s approach assumes the next debt-ceiling vote will come after the next election.

These are the current political positions of the parties. They are not the actual driving forces of the confrontation. There is a much more aggressive political agenda on both sides.

Around the Democratic political campfires, many have conjured up “the memory” of 1995. President Clinton was on the ropes, the Democrats had lost the House for the first time in 40 years. Things were bad in liberal town, sort of like today.

Then Speaker Newt Gingrich (R-Ga.) and friends came to their rescue. They closed the government down. Veterans could not go to veterans’ hospitals, Social Security checks were late and the day-to-day things government does on which people depend stopped.

It was an overreach by a Republican House. Clinton was resurrected and Democrats got their bounce back. The times are not the same but many Democratic political strategists think they can be closely reconstructed. 

If the president is seen as more reasonable by offering a $4 trillion reduction, he has the high ground, they argue. Once there, Democrats are sure that Republican House members will be blamed.

On the Republican side the calculation is equally charged. The issues for the next election are spending, deficits, debt and jobs. If the Republican leadership signs on to a $4 trillion debt reduction package, three of those four issues go away. It would be difficult to run against a charismatic president without them. The answer: Pass a leaner package, avoid a shutdown and keep the spending and debt issues alive through the next election.  

There is cynicism on both sides here. If the president actually wanted $4 trillion in debt reduction, he could have much more easily gotten it by supporting his own Simpson-Bowles initiative, which was bipartisan and would have had tremendous momentum with his support.

But of course he really does not want the actual reductions needed to get $4 trillion in cuts; he wants the political high ground of saying he is for it during this debt ceiling debate.

The GOP, for its part, cannot credibly deny that $4 trillion is a big number and really does a great deal to right our fiscal ship. The claim that this involves too much in the way of tax increases is a straw dog. The tax issue can be addressed the same way former President Ronald Reagan did it, with a massive reform package that eliminates deductions and exemptions and cuts rates radically, thus producing more revenue through compliance and economic growth.

Both sides are being too political by half. It is a distinct possibility they will both end up in the same place, with the public finding both parties out of touch and unresponsive.

There are better approaches. Use the debt ceiling as a vehicle to set up an enforceable process that addresses the long-term debt. Return to the concept of the bipartisan Simpson-Bowles commission, only this time give its recommendations a statutory mandate with specific instructions to address Medicare, Medicaid, Social Security and tax reform. Make the report subject to a super-majority vote, up or down, with no amendments. Give the American people something to look to as a positive effort to solve this massive debt issue that hangs over our nation’s prosperity and threatens our children’s future. It would benefit both parties — and the nation — immensely.

Judd Gregg is a former governor and three-term senator from New Hampshire who served as chairman and ranking member of the Senate Budget Committee and also as ranking member of the Senate Appropriations Foreign Operations Subcommittee.