Krugman, Hennessey skeptical of deficit commission

As the Washington Post reports, the Obama administration is set to sign an executive order establishing a bipartisan commission to look at ways to reduce the budget deficit. Both Keith Hennessey on the right and Paul Krugman on the left are skeptical.

Hennessey does a terrific side-by-side of the Obama administration's plan for a commission versus the Conrad-Gregg commission proposal. One of Keith's strongest points is with regard to the goals of the relative commissions: most commission proposals have focused on the long run, in particular the growth of entitlements. While the Obama commission would be able to make recommendations in these areas, their specific goal is to reduce the deficit to 3 percent of GDP by 2015. Not only does that tend to ignore the longer-run problems, it seems to me that the short run deficit really is the business of Congress. I'm fine on a fast track procedure by which a commission can recommend longer-term reforms, but if we also need a commission to balance the budget year-in and year-out then we might as well send Congress home.

Krugman argues that the Greenspan Commission that led to the 1983 Social Security reforms was just a ruse to raise taxes on working people to fund tax cuts for the rich. I'm not sure how well that really holds up, since it's pretty clear that the Greenspan Commission didn't know that its proposal would lead to short term surpluses, and if it didn't, it's hard to argue that it intended to use those short-term surpluses to offset deficits driven by tax cuts elsewhere. In any case, I somehow suspect that's not how an Obama commission would end up. If anything, there's a reasonable fear of the contrary: that it would push to increase taxes in ways that Democrats alone would like to do but politically couldn't accomplish.

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Washington Post Partnership With Peterson-Funded Fiscal Times Draws Fire From Left

Politico reports on protests against a new partnership between the Washington Post and the Fiscal Times, a newsgroup focusing on public finance issued funded by the Peter G. Peterson Foundation.

Critics are calling on The Washington Post to stop printing news articles from The Fiscal Times, a new "independent digital news publication" funded by Peter G. Peterson, a former Wall Street financier and longtime advocate of changes to Social Security.

The Post and the new publication announced an agreement last month to jointly produce content "focusing on budget and fiscal issues," and the first article from The Fiscal Times appeared in The Post on Thursday. Headlined "Support grows for tackling nation's debt," it described growing momentum for "a special commission to make the tough decisions that will be required to dig the nation out of debt."

In a letter to The Post's ombudsman, 14 academic and public-policy experts on Social Security said the newspaper should "rescind the partnership, "reserve opinion pieces for the op-ed page, and not allow itself to be a propaganda arm for ideologues who use fiscal distress as a stalking horse to destroy social insurance."

On one hand, the letter of protest is overblown: a letter from Dean Baker, Nancy Altman, Roger Hickey and others from the left complaining of ideologues is a bit much, particularly since Fiscal Times advisory board includes former CBO director and current Urban Institute president Robert D. Reischauer. If the Urban Institute is a hotbed of ideologues looking to destroy social insurance then I think we'd better just hang it all up.

That said, the writers do have a point: Peterson and those who are funded by him don't take strong views on how to fix Social Security and Medicare, but they are forceful in arguing that entitlements are a big problem – a view on which I agree – rather than a small one. The "big versus small problem" disagreement is a pretty defining one between right and left and I'm not sure how comfortable I'd feel if the shoe were on the other foot.

The first Post article from the Fiscal Times doesn't seem to show any bias, but then again, people on the left don't notice any bias in the New York Times so I'm not sure my judgment is exactly balanced.

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