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The Joint Select Committee on Deficit Reduction (the “super committee”) recently announced its decision to not make any recommendations concerning the current deficit, failing to lead the U.S. economy to a sustainable path to recovery. On Monday, committee member Senator Rob Portman (R-OH) joined the American Enterprise Institute (AEI) to discuss the implications of the super committee’s decision and the next steps in policy reform. He stressed the dual challenges of the current fiscal crisis and economic slump that are creating short-term and generational pressure on the economy. Portman also recognized the need for structural reforms in corporate income taxation, advocating a deficit-neutral tax reform conceptually outlined by the super committee, as well as the modernization of entitlement programs. Following Portman’s remarks, Kevin Hassett, Norm Ornstein and Andrew Biggs of AEI and William Gale of the Brookings Institution took part in a panel discussion about the senator’s remarks and the super committee’s failure. Ornstein discussed the difficulty of creating legislative bills from proposed ideas and guidelines, citing this problem as what ultimately inhibited a recommendation from the super committee. Biggs emphasized the structural hindrance of incentives in politics. As the political system exploits the ability to borrow to smooth over ideological differences, reform outcomes remain inefficient and uniquely dysfunctional. Gale questioned the ultimate decision of the super committee to provide no recommendation but also stated that the committee’s announcement does not change the economy; the country was already drifting in a dangerous economic direction.
What did the Joint Select Committee on Deficit Reduction’s announcement on November 23 contain: a successful bipartisan strategy for reducing the deficit or a disheartening lack of consensus? On the heels of the announcement, Senator Rob Portman (R-OH), one of the 12 members of the committee, speaks at the American Enterprise Institute to discuss the details and implications of the super committee’s decisions. Following the senator’s remarks, a panel of experts offers their analyses of the committee’s conclusions and their significance for the political and economic future of the country.
ALEX BRILL, AEI
ROB PORTMAN (R-OH), U.S. Senate
Question and Answer Session
KEVIN A. HASSETT, AEI
ANDREW G. BIGGS, AEI
NORMAN J. ORNSTEIN, AEI
WILLIAM G. GALE, Brookings Institution
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Senator Rob Portman (R-OH) was born and raised in Cincinnati, where he lives today with his family. Growing up, he and his brother and sister worked at Portman Equipment Company, which his father had started and grown into a company with 300 employees. He went into private practice as a lawyer, and in 1993 was elected to the House of Representatives, where he served the Second District of Ohio for 12 years. In the House, he was known for finding bipartisan agreement on initiatives to increase retirement savings, reform the IRS and add over 50 new taxpayer rights, curb unfunded mandates, reduce taxes, and expand drug prevention and land conservation efforts. In 2005, he was chosen to be the United States trade representative, the Cabinet-level official responsible for implementing and enforcing U.S. trade policy, and he then served as the director of the Office of Management and Budget. He began his Senate term on January 5, 2011, and was one of the three Senate Republicans appointed to the Joint Select Committee on Deficit Reduction, referred to as the “super committee.”
Andrew G. Biggs is a resident scholar at AEI. Mr. Biggs was the principal deputy commissioner of the Social Security Administration, where he oversaw the agency’s policy research efforts and led its participation in the Social Security Trustees working group. He worked on Social Security reform at the National Economic Council in 2005 and was on the staff of the President’s Commission to Strengthen Social Security in 2001.
William G. Gale holds the Arjay and Frances Fearing Miller Chair in Federal Economic Policy in the economic studies program at the Brookings Institution and is the co-director of the Urban-Brookings Tax Policy Center. His areas of expertise include taxation, budget and fiscal policy, private saving behavior, pensions and intergenerational transfers of wealth. Mr. Gale is a former senior staff economist for the President’s Council of Economic Advisers and a former assistant professor of economics at the University of California at Los Angeles. He is the author or co-author of numerous academic and popular books, including “Economic Effects of Fundamental Tax Reform” (Brookings Institution, 1996), “Rethinking Estate and Gift Taxation” (Brookings Institution, 2001), “Private Pensions and Public Policies” (Brookings Institution, 2004), “The Evolving Pension System: Trends, Effects, and Proposals for Reform” (Brookings Institution, 2005), “Aging Gracefully: Ideas to Improve Retirement Security in America” (Century Foundation, 2006) and “Automatic: Changing the Way America Saves” (Brookings Institution, 2009).
Kevin A. Hassett is the director of economic policy studies and a senior fellow at AEI. Before joining AEI, he was a senior economist at the Board of Governors of the Federal Reserve System and an associate professor of economics and finance at the Graduate School of Business of Columbia University, as well as a policy consultant to the Treasury Department during the George H. W. Bush and Clinton administrations. He served as an economic adviser to the George W. Bush 2004 presidential campaign, chief economic adviser to Senator John McCain during the 2000 presidential primaries, and senior economic adviser to the McCain 2008 presidential campaign. Mr. Hassett also writes a column for National Review.
Norman J. Ornstein is a longtime observer of Congress and politics. He writes a weekly column for Roll Call and is an election analyst for CBS News. He also serves as co-director of the AEI-Brookings Project on Redistricting and as a senior counselor to the Continuity of Government Commission. Mr. Ornstein led a working group of scholars and practitioners that helped shape the law known as McCain-Feingold, which reformed the campaign-financing system. He was elected as a fellow of the American Academy of Arts and Sciences in 2004. His many books include “The Permanent Campaign and Its Future” (AEI Press, 2000), “The Broken Branch: How Congress Is Failing America and How to Get It Back on Track” (Oxford University Press, 2006, with Thomas E. Mann), and, most recently, “Vital Statistics on Congress, 2008” (Brookings Institution Press, 2008, with Mr. Mann and Michael Malbin).