Obama Creates Fiscal Commission, Taxpayer Advocates Advance Alternatives

Published March 18, 2010

Taxpayer advocates are proposing alternatives to President Barack Obama’s executive order establishing the so-called National Commission on Fiscal Responsibility and Reform, a panel to recommend fast-tracked legislation making wholesale changes to government spending and the tax code.

Obama signed the order in February. The commission resembles one that had been proposed in the Senate but rejected.

Groups including the AFL-CIO and NAACP opposed the Senate plan because they feared welfare program cuts. On the other hand, taxpayer advocates pointed to the threat of higher taxes in the plan.

The taxpayer advocates are basing their concerns, which apply also to the President’s commission, on actual experience.

Broken Promises
“In past budget deals, Congress has promised to cut spending later in exchange for tax increases now. Those spending cuts never actually happened,” said Rep. Patrick McHenry (R-NC). “Instead, the extra revenue just let Congress defer dealing with the tough structural problems behind the crisis. Taking tax increases off the table is the only way we will ever have real reform.”

McHenry is the sponsor of H.R.1557, the CORE Spending Act, which would create a bipartisan reform commission to address entitlement-spending reform. The Act explicitly prohibits tax increases or new taxes in any commission proposal.

While different in scope, McHenry’s proposal is similar to two other pieces of legislation modeled after the successful Base Realignment and Closure (BRAC) Commission in removing damaging tax increases from the equation.

Fiscal conservatives point to the BRAC process as a model for reform at all levels of government—federal, state and local. The process, put in place by Congress in 1990, led to the closure of military bases that were underused in the wake of the Cold War, and has helped streamline military spending.

Base-Closing Model
“The only way for a spending or any other such commission to be effective is for it to have clear objectives, be narrowly focused, and to require Congressional action. Namely, it needs to model [itself on] the Base Realignment and Closure Commission,” said U.S. Sen. Sam Brownback (R-KS). He is sponsoring S.1282, the Commission on the Accountability and Review of Federal Agencies (CARFA) Act, modeled after the base closure commission.

“That idea has become known as CARFA, and a bipartisan majority just voted in favor of it in the Senate. CARFA is the only proven process by which otherwise permanent government programs can be eliminated with savings directed toward paying down the national debt or redirecting saved funds to higher priorities, like keeping tax rates low,” he said.

Rep. John Sullivan (R-OK) has introduced a similar bill in the U.S. House of Representatives.

Politics Out
“It’s clear that Congress has failed to do its job, and we need to take drastic action to restore fiscal sanity in Washington,” Sullivan said. “I firmly believe a BRAC-style spending commission, like my legislation H.R. 1023, which takes politics out of the equation and tax increases off the table, is the way to do it.

“What we absolutely don’t want is a commission, such as the one ordered by President Obama, that is designed to raise taxes on the American people,” he added. “We have to cut spending, not raise taxes. BRAC is a proven model that is used by the military to eliminate waste and save taxpayer money. Applying this same approach at the federal, state, and even municipal levels is just good government, plain and simple.”

Americans for Tax Reform President Grover Norquist says the BRAC process worked precisely because it took tax increases off the table.

“The BRAC commission would not have worked if it had been tasked with either closing unnecessary bases or raising taxes to pay for unnecessary bases,” Norquist said. “It worked because it had one job: To save taxpayer money by closing unnecessary bases. That’s the model we should follow at the federal, and quite frankly, at the state level too.”

Model State Bill
A model for state legislative language could come from California, where former State Senator and now Congressman Tom McClintock (R) sponsored a bill establishing a BRAC commission. The bill made it through the State Senate twice only to be stopped in the House both times.

McClintock’s congressional BRAC bill stands for “Bureaucracy Realignment and Closure Commission.”

In testimony for his California BRAC bill, McClintock said, “Wherever we sit on the political spectrum, I think we all agree that this government could operate a lot more efficiently. If we can duplicate the success of the federal BRAC, it means future legislatures will be spared the specter of $20 billion-plus budget deficits and future taxpayers can be spared a bureaucracy that is now spending a larger portion of their earnings—and delivering less with it—than at any time in our history.”

A representative of the American Legislative Exchange Council (ALEC) agreed with McClintock’s notion, and the organization is developing model language for state lawmakers.

“If states ever wish to get their fiscal houses back in order, controlling state spending growth is a necessity,” said Jonathan Williams, director of ALEC’s Tax and Fiscal Policy Task Force. “BRAC-style spending reform would give legislators another tool to stop wasteful spending by taking some of the special interest politics out of the budgeting process.” 

Sandra Fabry ([email protected]) is executive director of the Center for Fiscal Accountability, a project of Americans for Tax Reform.