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Archive for Sunday, May 21, 2006

Panel should tackle entitlement programs

May 21, 2006

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— Almost forgotten in the rush of events these last four months is the proposal President Bush offered in the State of the Union address for a bipartisan commission to examine the future of Medicare, Medicaid, Social Security and other entitlement programs.

But that idea is due for a rebirth next month - in the form of legislation to create such a commission. Its sponsor, Rep. Frank Wolf, a Republican from Virginia, is well aware of the hazards facing any such enterprise. But unlike the president, he is explicitly prepared to remove one giant roadblock by signaling that everything - including taxes - would be on the table.

The need for such a bipartisan approach is evident. As Charles Blahous, the White House aide who has been pursuing the commission idea, told a Concord Coalition forum last week, Medicare and Medicaid are growing far faster than inflation and will consume an ever-larger share of the budget as the baby boomers reach retirement age, starting in just a couple years. Social Security and veterans' pensions are moving in the same direction.

"We cannot wait until 2040," when those programs could crater, Blahous said. "And we can't just do incremental reform."

Bush took his first stab at fixing Social Security last year with a proposal to create private accounts, but it ran into a buzz saw of opposition led by AARP and congressional Democrats, and never came to a vote.

The commission idea seemed a safe fallback when Bush floated it in January, but his overtures to Democrats were not accepted. House Minority Leader Nancy Pelosi publicly ridiculed the idea, and former Treasury Secretary Robert Rubin, approached personally by the president, said that the mandate of the commission would have to be broad enough to include revenues before he would consider participating.

Months later, the White House insists it is still seeking partners for the project and a spokesman told me that "there is no litmus test" for participants. But I have talked with many of the backstage players in this drama, and their sense is that Bush will not allow his tax cuts to be weighed along with any savings on the benefits side - at least not before this November's midterm election.

Enter Frank Wolf, a veteran Republican known as "the conscience of the House," because of his involvement in humanitarian causes here and overseas. "The issue is not just economic, it's moral," he told me. "We have 11 grandchildren, and I cannot square my generation laying off our debt on them."

"I supported all the president's tax cuts," Wolf said, "but I look down the road and I see just a very bleak situation."

Wolf will propose a bipartisan commission that would hold hearings around the country and report back in six to nine months on steps to deal with the long-term budget crisis. His legislation, modeled on the procedure now used for closing surplus military bases, would require the House and Senate to hold a vote on the commission proposal - but allow each body and the president to submit an alternative that achieves at least as good a result.

Wolf's hope is that the commission would attract such figures as former Reps. John Kasich, an Ohio Republican, and Charles Stenholm, a Texas Democrat, or former Treasury Secretaries Rubin and James A. Baker III.

His proposal meets most of the criteria set forth at last week's panel by David Walker, the head of the Governmental Accountability Office, as critical to a successful commission. But Walker said presidential support and leadership are also vital to success.

Wolf told me, "You'd hope the commission members wouldn't look at taxes first, but they have to look at everything." That was emphatically the view of everyone on the Concord Coalition panel, including Walker, Stenholm, and two rather liberal economists, Isabel Sawhill and Maya MacGuineas, as well as Joseph Minarik of the business-backed Committee for Economic Development.

The most conservative panelist, Stuart Butler of the Heritage Foundation, said that he accepted the idea that revenues would have to be open to discussion for the Democrats to "buy in." But he proposed that conservatives could be mollified if the commission's mandate included an instruction that any changes in the tax code must help simplify the system and increase economic growth. "That way, it's win-win," he said.

The White House had scheduled a meeting for the president with some of the experts on the Concord Coalition panel to walk through the plans for such a commission. That session was postponed and it has not been rescheduled.

But if the president is interested - and if he is willing to put "everything on the table" - the Wolf initiative could become his action-forcing device.

David Broder is a columnist for Washington Post Writers Group.

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