The outline of a proposal to drastically scale back the federal deficit unveiled Wednesday offers a real challenge to President Obama. The ambitious plan, which sends a whole herd of sacred cows to the slaughterhouse, is exactly the kind of thing he came to Washington promising to champion — a real solution to the nation's problems that have been perpetuated by partisan gamesmanship for years. This is something that can't be done without changing the culture of Washington.
But the proposal is, just as significantly, a test for the tea party and its newly elected champions in Congress. If one theme unifies tea party activists across the nation it is the idea that we have to stop spending money we don't have and balance the budget. Their reaction to this proposal will be a real test of how they differ from the eat-cake-and-lose-weight Republican crowd that's been in Washington for the last decade.
There is some Goldilocks appeal to a proposal that stirred angry reactions from both House Speaker Nancy Pelosi ("simply unacceptable") and establishment Republican anti-tax hardliner Grover Norquist (who said it would violate a pledge not to raise taxes). But it's going to take a great deal of careful analysis to determine whether these ideas are the right ones to set the country on a sustainable path and to equitably distribute the burden of paying for necessary services.
And in any case, the proposal represents just the opinions of Democrat Erskine Bowles and Republican Alan K. Simpson, the former Clinton administration chief of staff and Wyoming senator who co-chaired the panel. It is bound to be sliced and diced by the other members of the commission, which includes power players from the current Congressional leadership of both parties.
Even if that group approves something like this plan before its Dec. 1 deadline, it still won't mean much. The chances that it would ever be voted on in its current form were dashed a year ago when the Senate failed to support by a sufficient margin a plan to treat this exercise like the Congress does the realignment and closure of military bases. Because of the tangle of local political prerogatives inherent in that process, Congress establishes a commission to make a recommendation that it can only vote up or down, not amend, but too few Republicans signed on to that idea for a debt commission, and it died, only to be replaced by this one, which was formed by President Obama but lacks a Congressional mandate.
What is useful about this proposal is that it lays clear the fact that we cannot solve our debt problems without doing a lot of uncomfortable things. In particular, the plan demonstrates that spending cuts alone aren't going to solve the problem. The proposal calls for cutting $100 billion from the Pentagon, slashing the federal work force by 10 percent, permanently ending earmarks, freezing federal salaries for three years, slowing growth of foreign aid and cutting commercial spaceflight, among other things. All that amounts to about $1.7 trillion in cuts over the period of 2012-2020. The projected deficit during that period is about $7.7 trillion.
A big part of the solution is ending so-called "tax expenditures" — that is, goodies in the tax code for everything from exemptions on mortgage interest to farm subsidies. Those amount to $1.1 trillion a year. The proposal would eliminate those, lower overall income tax rates, and make other changes to the tax code. Some people would win, some people would lose. But this is the part of the equation that gets sticky for the tea party because it does call for some people to pay more than they do now. Likewise, part of the solution for keeping Social Security solvent — treated in this proposal as a separate problem from the general federal deficit — involves people paying Social Security taxes on the first $190,000 of their income by 2020, not the first $106,200, as under current law.
To be sure, there's plenty in this plan that liberals dislike, too — in particular, the gradual raising of the Social Security retirement age to 69, never mind that the people who would be affected by that are now in preschool. Liberals have denounced the plan much more strongly than conservatives, with some even suggesting that if Mr. Obama pursues these reforms, he will face a primary challenge in 2012.
In short, this is a big idea that would solve what everybody agrees is a pressing national problem but is probably political suicide for both Democrats and Republicans. That makes it exactly the kind of thing that politics as usual can't handle. But for all their differences, the tea party and President Obama came to Washington promising to end politics as usual. Now's their chance.