The Details of a Potential Congressional Fiscal Commission

In recent months, there has been growing concern in Congress that the deepening partisan standoff is making a course correction for the federal budget, which is becoming more urgent by the day, improbable through regular order. That belief has led to the development of possible workarounds, mainly via the creation of a temporary fiscal commission housed within Congress. While there is growing support for this approach, it is not clear if it is sufficient to get the needed authorizing legislation attached to a must-pass vehicle in the coming weeks.

The commission bills getting the most attention are H.R. 5779 in the House, sponsored by Bill Huizenga (R) and Scott Peters (D), and S. 3262 in the Senate, sponsored by Joe Manchin (D) and Mitt Romney (R). Both versions have additional bipartisan supporters.

Their main provisions, summarized below, are similar but not identical.

Because this fiscal commission would be an initiative of the legislative branch, it would have some institutional distance from the presidency and the relevant agencies in the executive branch. That separation would place more pressure on the Congressional Budget Office (CBO) to be the primary source of budget and economic information supporting the commission’s work.

It is easy to see the potential attraction of creating a commission in the current environment. Candidates from both parties running for office next year, including those vying for the presidency, could use the commission as an excuse to duck questions about what they would do to slow the pace of rising federal debt.

On the other hand, the commission would also pose a threat to the priorities of both parties. The gap between projected revenue and spending is so wide that closing it will require both a large tax increase and restraint of the major benefit programs. By implication, the tax cuts passed during the Trump presidency would be at risk, as would the commitment by Democrats to resist almost all potential benefit adjustments, such as increases in the retirement ages for the main programs, such as Social Security and Medicare.

There is also no assurance that a commission’s recommendations would be approved by Congress. It is possible that both parties would find different reasons to stand in the way of a commission-led solution, either by opposing approval before the commission finishes its work, or at the point when those recommendations are under consideration in the House or Senate. There are many examples from recent years of commissions that have failed. Still, a new attempt may be worth a try, given the long odds of a fix emerging through the traditional budget process.

It won’t be easy, though. Both parties’ red lines are still very much in play, and may only recede if a crisis emerged. At that point, a commission might be seen as the least objectionable way out of the problem.

James C. Capretta is a senior fellow at the American Enterprise Institute. Jack Rowing is a research associate at AEI.