We're still not clear why the co-chairmen of the president's commission on debt reform decided to present their plan to the public this week without the support of the rest of the commission. But one thing is crystal clear — reactions to the plan show just how deeply the nation's political leaders and special interests are entranced in a state of denial.
Trillion dollar budget deficits are not sustainable, and yet they are projected to continue long into the future. Meanwhile, the dollar's dominance as the world's leading currency is being threatened and the debt, much of which is owned by China, is becoming a national security concern. Should the current spend-and-borrow trend continue, the time will come when creditors begin to lose confidence in the nation's ability to repay its debts. Inflation and economic collapse then would loom on the horizon.
The panel's co-chairs, former Clinton White House chief of staff Erskine Bowles and retired Republican Sen. Alan Simpson, have presented a realistic approach to this crisis. Any real solution will involve sacrifices and new sources of revenue. They offered a bit of both.
But the reaction was swift and decisive. Outgoing House Speaker Nancy Pelosi called it "Simply unacceptable." Republicans, particularly those of the tea party persuasion, said they won't accept any tax increases. All the savings must come from cuts.
Of course, neither side has been able to come up with an alternative proposal. That's because no ideologically pure plan would be remotely realistic.
The Bowles-Simpson plan would raise Social Security's retirement age to 69 and reduce benefits, but not for a while. It would cut defense, cut farm subsidies, increase the federal gasoline tax by 15 cents a gallon and remove a lot of tax deductions, such as for interest paid on mortgages. It also would lower marginal income tax rates considerably. It would cut $2 to $3 for every $1 it raises through new taxes.
It is a centrist approach — the type of thing a bright CEO might devise in order to save a failing business. It's also a plan that doesn't attempt to spare Americans from the awful truth. Leaders of the debt commission have been surprisingly good at this, telling Americans in recent months that the nation's debt problem is a cancer that threatens to destroy the nation from within, and that Social Security, Medicare and Medicaid now eat up all federal revenues.
Most of all, however, it is a plan. We don't doubt that someone could draft a better one. But we're certain that any realistic one would have to require painful sacrifices.
That means special interests would have to give a little; Americans would have to sacrifice some entitlements for the good of everyone; and some people would have to lose their tax breaks.
The co-chairs of the commission may have violated protocol by presenting this plan without a broader consensus, but Americans should be glad they did. It has gotten the discussions off on a realistic tone.