The fiscal cliff is dead. Long live the fiscal cliff!
If you were unsatisfied with the deal struck last week or just miss the D.C. drama, fear not. We’ll be back at the abyss soon.
In March, the so-called sequester budget cuts stand to kick in; appropriations for federal operations will dry up; and the Treasury will run out of ways to pay the bills without raising the debt ceiling. As Congress faces that unholy trinity, Georgia’s Johnny Isakson will be right in the thick of things.
The second-term GOP senator was named Thursday to the Senate Finance Committee, which handles those big budgetary matters. Having to face those three pressures at once actually gives Isakson “some degree of optimism.”
“Because it is such a confluence of things, maybe we’ll get a macro deal instead of a micro deal,” Isakson said by phone Thursday.
Isakson has yet to attend his first meeting as a Finance member, but he knows where he wants the debate to go. “I think the revenue issue has been dealt with,” he said. “I know the president probably thinks there is some more revenue somewhere, but we’ve had the revenue debate. No one can say that wasn’t a thorough analysis of the revenue situation.”
Now it’s time to tackle spending, especially Social Security and Medicare.
“Most everyone [in the Senate] understands Social Security is the easiest to fix without harming current beneficiaries or beneficiaries in the reasonable future,” he said. Raising the eligibility age gradually over time is one way. Two others are making benefits less generous for high earners or tying benefit increases to changes in prices rather than wages.
Medicare, though, is “the big, big consumer of dollars,” Isakson said. It’s “the big gorilla” that’s “already running rampant.”
He prefers the “premium support” plan pitched by Rep. Paul Ryan and some Democrats. “That way you can gauge the cost [to taxpayers] and you engage the consumer more” in being cost-conscious than with today’s fee-for-service plan.
Whatever the specifics of a March deal, Isakson emphasized the need to let the legislative process work. He reported “universal frustration” among senators that last week’s deal was struck “by two people [Senate GOP Leader Mitch McConnell and Vice President Joe Biden] in a back room.”
He noted the irony that last week, while those talks went on behind closed doors, the Senate engaged in a now-rare regular order of business, with debate on the floor and the opportunity for all senators to offer amendments.
“I think [regular order] would help the public to understand the difficulty of the problem, but also the mechanism of the solution,” he said.
Isakson prefers to work off the Simpson-Bowles proposal introduced in late 2010. That plan would reduce deficits by $4 trillion over 10 years by cutting spending and making the tax code simpler and flatter to generate more revenue.
He expressed great frustration with President Barack Obama, who commissioned the plan but whose own proposals, especially for taxes, contradict its methods: “I don’t know if he was afraid of it, or if he is so bent on spending and raising revenues, and so averse to fiscal accountability, that he didn’t want to bring it up.”
In any case, Isakson sees no good reason for Washington to break down into its own March madness. “All the solutions are on the table,” he said, “it’s just a matter of which ones you pick up and use.”
– By Kyle Wingfield