The House Budget Committee is considering the creation of a bipartisan, bicameral fiscal commission, as proposed in H.R. 5779, “The Fiscal Commission Act of 2023”, to address the insolvency of critical government programs in a depoliticized and responsible way. The commission would aim to bring all sides together to understand the principal drivers of the unsustainable national debt and to fix the insolvency of critical government programs.

On October 19, 2023, the Committee held a hearing with several current and former Members of Congress who each possess a deep understanding of our nation’s financial situation including Former Senator and Office of Management and Budget Director Rob Portman (R-OH), Former Senator and Chairman of the Senate Budget Committee Kent Conrad (D-ND),  Former House Budget Committee Chairman Steve Womack (R-AR), and Former Congressman and Budget Chairman John Yarmouth (D-KY). During the hearing, several arguments were made both for and against the creation of a bipartisan fiscal commission.

Arguments in favor of the commission included:

• The need for a depoliticized and responsible approach to address the insolvency of critical government programs and the unsustainable national debt. The commission would aim to bring all sides together to understand the principal drivers of the national debt and to fix the insolvency of critical government programs.

• The belief that the commission could help bypass politics and focus on policies that will affect the future. It was argued that an agreement would never be reached if steps to increase revenue were taken off the table.

• The commission was seen as a mechanism to force action and make uncomfortable decisions. It was suggested that the commission could bypass leadership and get to the floor to be voted on. The work done by the panel would be included in the commission’s considerations.

Arguments against the commission included:

• Skepticism about the effectiveness of such commissions based on prior experiences. It was argued that while these commissions have elevated the discussion, they have not accomplished much. There was strong opposition to any commission that has as its primary objective to cut Medicare and Social Security and avoid congressional accountability for those cuts.

• The belief that the problem is not the process, but the people. If members of Congress are not willing to muster the determination and courage to take on fiscal challenges, even the best ideas will never be implemented. It was argued that Congress has tried to solve these problems and has not been successful.

• Concerns about the commission’s potential to cut Social Security and Medicare, even if that is not the stated primary objective of the commission. It was argued that if revenues are not on the table, the commission would primarily be a mechanism to cut these programs.

In favor of the commission, House Budget Committee Chair Jodey Arrington (R-TX) stated:

“I think we need a debt commission of some sort. But we have to have a commission, a framework, a model that works. And the reason we have you here is to share with us your experience and your wisdom, so that we can apply the necessary contours to whatever debt commission we can pass so that in the ultimate analysis and outcome, we have a solution that we can hold hands together in a bipartisan way and move not only move that issue forward, but move the country forward with some peace of mind and confidence that our country is on a better path”.

Rep. Jimmy Panetta (D-CA) also expressed his support for the commission, stating:

“That’s why I’m a strong supporter of the commission. That’s why I’m proud to introduce the legislation that [Representatives] Scott [Peters] and Bill [Huizenga] put together in regards to this commission and as members of the bipartisan fiscal forum. And I do want to make something clear, as we heard, I do think everything should be on the table. And that includes revenue, the United States is a low tax country, ranking 32nd out of 38. In OECD countries in terms of tax to GDP ratio, I just think we’ll never come to an agreement if we take one half of that equation, revenue, off the table”.

Rep. Brendan Boyle (D-PA) expressed his skepticism about the effectiveness of such a commission, stating:

“I appreciate and I know, Jodey, my Chairman is sincere, in his belief that a commission is the answer. That is not my position. While I’m attempting to keep an open mind about it. I am more than a little bit skeptical that a commission would work, just frankly, given the past history of the last dozen years”.

He further argued that the ultimate decision is not about the process, but about the people and their willingness to take on fiscal challenges:

“I also think that whether it’s a commission or a straight up vote in Congress, what we’re really avoiding is the ultimate decision. That’s, that’s the ballgame. And not the process by which we get to resolve that ultimate question”.

TCS Observations

So, while there was a general consensus on the need to address the nation’s fiscal challenges, there were differing views on the effectiveness and approach of a bipartisan fiscal commission in achieving this goal.

As currently proposed, the commission would consist of 16-members, including 12 Members of Congress and four outside experts equally appointed by House and Senate leadership. The Speaker of the House, the House Minority Leader, the Senate Majority Leader, and the Senate Minority Leader will each select and designate four members to the commission. Of the selected commissioners, three will be members from their respective chambers and one will be an individual or expert from the private sector.

The commission’s primary function will be to identify policies to improve the fiscal situation in the medium term and to achieve a sustainable debt-to-GDP ratio in the long term. For any recommendations related to federal programs for which a federal trust fund exists, solvency must be improved for decades to come. The commission will also propose recommendations designed to balance the budget at the earliest reasonable date, including at minimum, stabilizing the debt-to-GDP ratio at or below 100 percent within 10 years.

Some of the concerns about only cutting Social Security and Medicare and not examining revenues are mitigated by the structure of the proposed commission. Half of the membership would be selected by the Senate Majority Leader and the House Minority Leader, both Democrats who presumably would not pick lawmakers and experts who would recommend that. Furthermore, it would take more than a simple majority to recommend reforms that would be considered by Congress. At least three members of both parties have to vote for the recommendation for it to be forwarded. In other words, even if all eight Republican members supported a proposal, three Democrats also have to support it to move it forward.

Historical Perspective

This is not the first time Congress has considered the consolidation of budget efforts. One of the earliest efforts to centralize budgetary authority in Congress occurred in 1919 when a select committee on the budget was established. This committee recommended that the House adopt a budget process reform that centralized the authority to report all appropriations to one committee. The House accepted this recommendation, and the Senate followed suit two years later.

One of the earliest known fiscal commissions was the Hoover Commission, established in 1947, which studied and investigated the organization and methods of operation of the Executive branch of the Federal Government, and recommended organization changes to promote economy, efficiency, and improved service.

In 1974, Congress established a formal budget process through the Congressional Budget and Impoundment Control Act. This law sought to create a coherent procedure for Congress’s revenue and spending decisions and to constrain a president’s ability to impound funds appropriated by Congress. The law established targets for aggregate spending and revenue totals, leaving traditional committees to determine the details. It also created the Congressional Budget Committees and the Congressional Budget Office (CBO) so that Congress didn’t have to rely on data from the Executive Branch’s Office of Management and Budget.

From 1981 to 1983 the National Commission on Social Security reform, more commonly known as the Greenspan Commission, named after its chairman, Alan Greenspan, was appointed to address the funding crisis facing Social Security at the time. The reform’s final report led to the Social Security Reform Act of 1983 which has been credited with keeping Social Security solvent for an estimated 50 years until 2033.

In 1985 and 1987, the Balanced Budget and Emergency Deficit Control Act and the Balanced Budget and Emergency Deficit Control Reaffirmation Act, also known as the Gramm–Rudman–Hollings Acts, were passed. These acts required a gradual reduction of the federal deficit by setting target deficits within six years. This was largely ineffective but did create the process of sequestration that enacts across-the-board cuts that survives to this day.

In 1997, as part of budget negotiations, Congress passed the Balanced Budget Act, which retained tax increases but cut capital gains taxes and reduced spending on Medicare and Medicaid. This act, along with a rapidly expanding economy, led to a budget surplus from fiscal years 1998 to 2001.

In 2010, President Obama established the bipartisan National Commission on Fiscal Responsibility and Reform, colloquially known as Simpson-Bowles for its co-chairs former Sen. Alan Simpson (R-WY) and former Clinton White House Chief of Staff Erskine Bowles. This commission was tasked with building bipartisan consensus to put forth solutions to tackle long-ignored fiscal challenges. The commission was comprised of 18 total members, with 12 members appointed by Senate and House leaders. Their recommendations received an 11-7 bipartisan vote but were not forwarded to Congress because the legislation authorizing the commissions required 14 yes votes to do so.

While opinion is split in Congress on how best to tackle our nation’s pressing financial challenges, it remains abundantly clear that action will be needed to get our fiscal house in order. As recent squabbles over the debt ceiling, government funding, and the political consequences of “being the adult in the room” have shown, that will not be easy in this Congress. Still, for the good of our nation’s fiscal wellbeing, action is sorely needed. A commission has its flaws, but it appears to be the tool with the greatest likelihood of success.