Welcome to Politics Bites, where every afternoon at It's A Free Country, we bring you the unmissable quotes from political conversations on WNYC. On today's Brian Lehrer Show, Nobel Prize winner in Economics, Joseph Stiglitz and Robert Kuttner, co-editor of The American Prospect magazine and senior fellow at Demos, discussed the demise of the president's deficit commission's proposal.
President Obama created the bi-partisan National Commission on Fiscal Responsibility and Reform last February and the commission has been mulling over solutions to the country's fiscal dilemma ever since. After voting on the proposal last week, the Commission did not get the super-majority they needed to officially send the deficit-cutting plan on to Congress. The Commission needed 14 out of 18 votes to send the plan along; they only had 11.
Though there were a few things the commission's plan did well, according to Joseph Stiglitz, like eliminating the special treatment of the capital gains tax, he says the commission was basically "out to lunch."
What worries me is they didn't have a clear vision of the short-run, the recession that we're in... They didn't really have a growth agenda nor a set of principles underlying tax policy.
Robert Kuttner agreed. He said the commission's plan just wasn't good enough, but Obama's timing in creating this commission wasn't great either.
I think Obama has just made such a mess of the politics of this. If you think about it, with one hand he's appointed this fiscal commission...he has to show his good faith by being in favor of deficit reduction at a time when if anything, the economy needs more deficit spending in the short run. And then in the other ring of the circus, you've got the Republicans trying to have deficit-widening tax cuts... If you wanted a recipe for devastating both the economy and everything that Democrats stand for, you couldn't do much better than the policy and the strategy that President Obama has followed.
Both Kuttner and Stiglitz said stimulating the economy needs to be a priority, not taxing the wealthy. In Kuttner's words:
I think the whole approach of the fiscal commission was to put the cart before the horse. The problem is not how do we reduce the deficit. The problem is how do we get a recovery going. Once we get a recovery going, reducing the deficit partly happens of its own accord... and then at that point it makes sense to have more tax increases.
Commission members, meanwhile, are taking credit for fundamentally changing Washington, even though they didn't reach the 14-vote threshold. Former SEIU president and Commission member Andy Stern voted against the plan, but he told the Associated Press that the work was an "enormous tectonic paradigm shift" in the debate about federal fiscal policy.