The leaders of President Obama's deficit commission sparked criticism from both sides of the political aisle Wednesday for proposing broad cuts to federal programs.
But the National Commission on Fiscal Responsibility and Reform has also come under attack for its unusual approach to staffing: Many of its employees aren't employed by the panel at all.
Instead, about one in four commission staffers is paid by outside entities, many of which have strong ideological points of view about how to tackle the deficit.
For example, the salaries of two senior staffers, Marc Goldwein and Ed Lorenzen, are paid by private groups that have previously advocated cuts to entitlement programs. Lorenzen is paid by the Peter G. Peterson Foundation, while Goldwein is paid by the Committee for a Responsible Federal Budget, which is also partly funded by the Peterson group.
The outsourcing has come under sharp criticism from seniors' organizations and liberal activists, who say the strategy is part of a broader conservative bias favoring painful entitlement cuts over other solutions. The fears of some liberal groups appeared to come true on Wednesday, when the commission's two leaders recommended significant reductions for Social Security and other social-welfare programs.
Bruce Reed, the panel's executive director, defended the staffing arrangement as fiscally responsible and said the staff includes a broad range of views. Other staffers paid by outside entities include an analyst from the liberal-leaning Economic Policy Institute and a Clinton administration official who now teaches at Johns Hopkins University, he said.
"We've got wonks from across the spectrum who have been working on this issue for years," Reed said. "Every possible voice from left, right or center has a voice on the commission."
But Barbara B. Kennelly, a former Democratic House member from Connecticut who heads the National Committee to Preserve Social Security and Medicare, said the commission's staffing structure is "unprecedented" and casts further doubt on its fairness.
"Taxpayers fund the commission and they should work independently of Washington lobbyists and power brokers," Kennelly said. "This is the type of shenanigans that average Americans are so upset about right now - that money talks and everyone else is left out."
The debate comes as the bipartisan commission nears a Dec. 1 deadline to recommend a plan for lowering the deficit. The panel's two co-chairmen, former Bill Clinton adviser Erskine Bowles and former senator Alan Simpson (R-Wyo.), issued their own recommendations on Wednesday calling for a reduction in Social Security benefits and broad spending cuts for many federal operations.
From the beginning, liberals have complained that the Obama-created commission is tilted in a conservative direction, meaning that it is likely to favor cuts to social programs. (Many conservatives disagree, arguing that Bowles-Simpson proposals to close tax loopholes would result in major tax increases.)
Simpson didn't help relations with liberal groups when he sent an e-mail this summer complaining that the government is "like a milk cow with 310 million tits!" He later apologized for the remark amid demands for his resignation.
Kennelly and other liberal-leaning critics say they are particularly troubled by the influence of Peterson, a billionaire and former investment banker who began a $6 million campaign this week urging lawmakers to cut the deficit. Peterson, co-founder of the Blackstone Group investment fund, paid for a series of town hall meetings this year that included participation by deficit commission members. He also funds the Fiscal Times, a digital news organization that focuses on federal debt issues.
Peterson representatives say the views and goals of his organizations have been distorted. Spokesman Patrick Dorton also said that Lorenzen, a former staffer of Rep. Steny H. Hoyer (D-Md.), is recused from any Peterson business while serving at the commission.
"We're a nonpartisan foundation," Dorton said. "We're committed to creating a dialogue on fiscal issues that includes a broad set of voices."
The Economic Policy Institute, the economics think tank, contributed staffer Ethan Pollack to the commission in hopes of bringing "a more progressive perspective" to the debate, said John Irons, the group's research policy director.
But Irons added that Wednesday's budget-cut proposals also show that staffers have a limited effect on commission policies. "Our view is basically that the commission has gone off the rails," he said.
Reed said about half a dozen panel employees are paid by outside entities rather than the commission, which has a budget of about $500,000. He said the arrangement, while unusual, is a smart way to limit costs by a panel devoted to the same goal.
"We have a very small budget, so we begged everyone we could find in both parties across the spectrum to sign up and help," said Reed, who is on leave as president of the centrist Democratic Leadership Council. "Part of our job is not to add to the problem ourselves."
A Few Facts on the Deficit
| Fri Jul. 23, 2010 12:32 PM PDT
- The current deficit can be attributed almost entirely to the effects of the economic downturn (reduced tax revenue, increased transfer payments), the Bush tax cuts, and the wars in Iraq and Afghanistan. David Leonhardt and the Center for Budget and Policy Priorities both have good articles and charts on this.
- The $1.47 trillion number is actually slightly better than the White House's February prediction. But the forecast for next year looks worse.
- Despite stimulus spending, which most independent experts believe improved the job picture, there is still massive unemployment in the United States.
- The median duration of unemployment is at its highest in 50 years.
- Liberals and conservatives will be arguing about what all this joblessness means. Derek Thompson explains: "Does it mean we must increase the duration of unemployment benefits to protect this new class of unemployed, or does it mean we need to stop subsidizing joblessness? Does it mean we need to expand federal retraining programs, or does it mean federal retraining programs aren't working? Does it mean we need more stimulus, more state aid, more infrastructure projects, more public works...or does it mean it's time to stop everything, stand back, and let business be business?" (Liberals go for the first option in each pairing.) This argument can be summed up simply as stimulus vs. austerity. Right now, stimulus seems to be fighting a losing battle.
- Conservatives don't have a record of caring about or reducing the budget deficit. They do have a record of caring about and reducing taxes on rich people.
- We spend almost as much on our military as the rest of the world combined. (A lot of the other countries that are spending big bucks are our allies.) If you include non-Pentagon defense-related expenditures, US defense spending in fiscal year 2010 will be somewhere between $880 billion and $1 trillion—even more if you include the interest we're paying on debt from past wars. Even if you strip out all that stuff, we're going to be spending north of $700 billion on the Pentagon and the wars in Iraq and Afghanistan next year.
- Long-term deficits are not the same as single-year deficits, and they have different causes. Our projected long-term deficits are driven almost entirely by the rapidly increasing cost of health care. (We're talking about increases driven by things other than the aging of the population.) If we could hold our health care costs at levels comparable to other countries', our long-term deficits would basically disappear. You can see this for yourself by using the Center for Economic and Policy Research's health care budget deficit calculator.
- Social Security is not the problem.
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