It seems to me that the pieces are in place for debt reduction to be one of the major issues of President Obama's first term. The NYT reports that in 10 years, the government will have to pay $700 billion in interest on the debt, up from $200 billion this year. But the recession puts policy makers in a precarious spot. Like a guy with his feet on two ice sheets floating in opposite directions, the White House wants two things: (1) to keep up aggressive deficit spending to fill the gaps in private demand and (2) to keep its eye on a long term deficit reduction plan than it considers politically feasible.
Evan Bayh wants to get Idea #2 rolling, so he's floated the idea of a Budget Commission: a binding, bipartisan resolution that would (in his words) "force members of Congress to take -- or reject -- a single gulp of
politically difficult medicine to treat the fiscal problems that are
ailing our country." Matt Yglesias isn't impressed.
I agree with him that bipartisan commissions, like the base closing resolution, succeed when politicians are in broad agreement but need the commission to hammer out the ugly, and potentially unpopular, details so they can save face on otherwise embarrassing slights to their constituents. But I also think today's news offers a glimpse at how debt reduction could shift from fringey, wonky discussion of interest rates into a mainstream war over money.
