Ezra Klein on Simpson-Bowles

Ezra Klein works really hard to find four things in Simpson-Bowles that he likes:

Here are the four best and five worst parts of the plan:

The good:

A payroll tax holiday in 2011: Simpson and Bowles embrace... a payroll-tax holiday in 2011. Actually, "embrace" might be a strong word. They say Congress should "consider" it. Still, a nod toward the need for policies speeding recovery is better than ignoring that need altogether.

Process, process, process: The Simpson-Bowles recommendations correctly identify congressional inertia as the central impediment... they make spending that busts the caps ineligible for... Reconciliation... instruct OMB to cut appropriations spending across-the-board by the amount that Congress has overspent unless Congress takes another vote to stop them... they strengthen the Independent Payment Advisory Board by applying it to all health-care providers sooner. They push tax reform through a "failsafe" that automatically increases taxes if Congress doesn't rework the system by 2013...

Defense spending and tax expenditures are major problems: The most positive impact the commission has had on the debate has been to move two formerly sacrosanct categories of spending onto the table....

A two-sided deal on Social Security: I don't particularly like the commission's Social Security recommendations, but I do like their vision of a deal that's more than just cuts and taxes....

Note that he really does not like their SS proposals--and they have no defense proposals. Their tax expenditure proposals don't reduce the deficit. And the "process" proposals have already been rejected by Repulicans who say that PAYGO should not apply to Republican proposals. So we are down to one good.

The bad seem to be to be much worse:

The bad:

The tax section: In an odd bid for Republican support, the commission caps revenues at 21 percent of GDP.... The commission's mandate was to balance the budget, not decide the size of government. This overstepped it.... No mention of a carbon tax or a value-added tax, both of which are preferred by many, if not most, tax-policy experts.

The 2012 start date: Simpson and Bowles start their cuts in 2012, as they assume the economy will have recovered by then. But what if it hasn't? A better approach would've been using an economic indicator as a trigger....

Raising the retirement age: If we want to cut Social Security benefits, we should cut Social Security benefits. Raising both the early and full retirement ages mainly penalizes those who hate their jobs or can no longer physically fulfill them. That's not the right way to reform Social Security.

Hobbling government: Among the plan's worst ideas is to cut congressional and White House budgets by 15 percent. Given the role of government and the complexity of modern life, members of Congress are probably understaffed even now. Taking staff away from them just means they'll either be more ignorant about the bills they're voting on, less responsive to their constituents.... The same goes for the plan's other aggressive cuts to the government.... "Washington needs to learn to do more with less, using fewer resources to accomplish existing goals without risking a decline in essential government services," the report says. But that's magical thinking. Companies and governments typically do less with less....

Cowardice on health-care reform: The plan's health-care savings largely consist of hoping the cost controls (IPAB, the excise tax, and various demonstration projects) in the new health-care law work and expanding their power and reach. But the commission "does not take a position" on the new law.... Given that health-care costs are the single most significant driver of our long-term budget problem, the commission's decision to hide from the big questions here is quite disappointing, particularly given their self-styled focus on making hard decisions and telling unpopular truths.