海角大神

厂耻苍诲补测鈥檚 Washington Post had this , with several quotes that give me optimism about the willingness of members of Congress to just do better in their deficit reduction negotiations the next time around. See, it turns out that the great peer pressure of the American public actually works. Skeptics may ask why the next round should be any different from the last round鈥搃t鈥檚 not like we were lacking bipartisan policy ideas the last time around鈥揵ut as the story and in particular Alice Rivlin explain, this time around really is different, politically, just because we鈥檝e already lived through the last time around:

Committee members might be eager to have their deliberations at least appear less rancorous than the negotiations over raising the debt ceiling that resulted in the panel鈥檚 creation.

But the tone of comments also suggests that after that hard-fought battle there might be a brief moment of opportunity to do what has eluded other bipartisan panels and special fiscal commissions.

鈥淭here鈥檚 a potential for a bipartisan deal here. There has been for a while,鈥� said Alice Rivlin, a former White House budget director who chaired the Bipartisan Policy Center鈥檚 Debt Reduction Task Force. 鈥淭he new element is the revulsion of the country and the world at the spectacle that we have just lived through.鈥�

And despite being labeled by some (based on his overall voting record) as the 鈥渕ost liberal鈥� of the super committee members, congressman Xavier Becerra doesn鈥檛 seem at all stuck in any ideological bunker when he puts it this way:

Rep. Xavier Becerra (D-Calif.) pledged to 鈥渂e as open as possible, check my ego and my preconditions at the door and let the work of the committee drive us to a conclusion.鈥�

It鈥檚 consistent with my column in today鈥檚 (), where I put on my yogi hat (while sitting at my budget analyst desk) and explain the tremendous potential, still, for base-broadening, deficit-reducing tax reform to come out of the super-committee round of the debt limit deal:

Having spent the past weekend in a yoga workshop where I was encouraged to look at the positive, let me try an 鈥渋sn鈥檛 it great that . . .鈥� perspective on this debt limit deal. Isn鈥檛 it great that policymakers on both sides of the aisle and both ends of Pennsylvania Avenue didn鈥檛 solve the whole problem this time around? They clearly weren鈥檛 ready to, and if they had committed to policies anyway, they surely wouldn鈥檛 have been well thought out. Importantly, taxes probably would have been off the table for good.

It turns out that our still-dysfunctional political process did something pretty good in coming to the debt limit deal (besides avoiding default, I mean). They opened up a lot of space to increase tax policy鈥檚 role in the second phase. There is a lot of wiggle room for revenues between the current-law baseline and the policy-extended baseline.

I then call for a commitment to stick to strict pay-as-you-go rules on the extension of any expiring tax cuts (especially the then-Bush-now-Obama ones), and specific recommendations for reductions in tax expenditures鈥搃.e., revenue increases gained by broadening the income tax base from its current definition. Now, there are a lot of technicalities to work out between now and November in terms of how a paygo commitment on the Bush tax cuts could be scored, but no matter what the official baseline, base-broadening tax reform would always 鈥渃ount鈥� as deficit reduction relative to current law (and not just current policy). And under the baseline that really matters in all this, the 鈥渂aseline of public expectations,鈥� letting the Bush tax cuts expire, or paying for any extension of any part of them, would also surely 鈥渃ount鈥� as deficit reduction.

So I am very hopeful that real progress will be made the next time around, especially with members having come out of their past awful behavior with some remorse and now facing some scolding and 鈥渢herapy work鈥� back home with their constituents. I conclude my Tax Notes column this way, still in yogic bliss (but really, not on any drugs!), about this potential 鈥渮en moment鈥� for tax policy鈥檚 role in deficit reduction:

The members of Congress chosen for the special committee have reputations as moderates with experience in working toward bipartisan consensus on budget and financial issues. Public opinion no doubt had great influence over these picks, as recent polls indicate that Americans are quickly losing respect for politicians perceived as unduly catering to extremist views. That same public opinion is likely to keep pressure on the committee to follow through and come up with major policy solutions that can earn bipartisan support.

So don鈥檛 count tax policy out of the debt limit deal. It may turn out just fine. Let鈥檚 harness the power of positive thinking and seek a better path to deficit reduction. Promoting the possible in this fiscal policy present moment is far more likely to lead to success than continuing to dwell on past mistakes. I鈥檓 convinced that this is the secret to getting our fiscal house in order while best promoting a civilized society.

Yes, it鈥檚 corny and incredibly optimistic, but what鈥檚 the alternative, and where would that attitude get us?

--------------------------

海角大神 has assembled a diverse group of the best economy-related bloggers out there. Our guest bloggers are not employed or directed by the Monitor and the views expressed are the bloggers' own, as is responsibility for the content of their blogs. To contact us about a blogger, click here. To add or view a comment on a guest blog, please go to the blogger's own site by clicking on the link above.