The Walking Dead Deal

There is a great deal of discussion about how, after this November’s election, there will occur in December the Mother of All Lame-Duck sessions by Congress. There is considerable legitimacy to this expectation.
[...]
Two major events will occur at the beginning of 2013 with consequences that may force Congress to act.

First is the sequester imposed by the budget deal that led to raising the debt ceiling last year which will force a cut of approximately $500 billion to $600 billion over the next 10 years in defense spending on top of the already significant cuts put in place from last summer. This is coupled with a significant further sequester on non-defense discretionary spending. Almost everyone realizes that with soldiers in the field, the defense cuts forced by the sequester would be dangerous and inappropriate.

Second, the Bush tax rates are scheduled to expire, which would cause a tax increase affecting all Americans who are productive to the tune of between $1.5 trillion and $2 trillion.

These two events, if allowed to go forward as proposed, would bludgeon the economic recovery and almost assure a relapse of the economy into some level of contraction, possibly even a renewed recession.

While the debt reduction that would result from these spending cuts and tax increases is needed to reduce our disastrous debt course, the manner in which they will occur will be counterproductive and would actually aggravate, to a large degree, the long-term debt problem by slowing economic growth.

The only viable, bipartisan vehicle that has been put forward to produce such an orderly reduction in our debt is the plan offered by former Sen. Alan Simpson (R-Wyo.) and former White House Chief of Staff Erskine Bowles.

House Budget Committee Chairman Paul Ryan’s (R-Wis.) budget does a great deal, but it is partisan and therefore not legislatively viable. President Obama has proposed a few ideas, but they are also partisan and not viable.

The Simpson-Bowles commission should reconvene before the crush of the lame- duck session. It should start where it left off with the fiscal menu it put on the table to cut $4 trillion from the debt over 10 years.

It should, however, be ready to expand beyond its original proposal, incorporating ideas from the president and Ryan, and adjust and update the original proposal. It should prepare a template that will give this lame-duck session, on which political pressure will be intense, an opportunity to act outside the partisan boxes that will frustrate serious action.