Timing Shouldn't Be a Problem for the Gang...

Despite broad enthusiasm for the Gang of Six proposal released yesterday, some have argued that there isn't enough time to put it into law. Senator Majority leader Harry Reid said, for example:

“I don’t want to do anything to jeopardize the enthusiasm for the Gang of Six, but I am the one who runs the Senate and I understand what the rules of the Senate are... Remember, we have only 13 days."

According to Senator Reid, CBO will need at least two weeks to score the Gang's proposal. We share the commitment to making sure the debt ceiling is lifted in a timely and responsible way. The truth is, though, putting this framework together is not all that complicated.

The proposal outlined by the Gang of Six is essentially composed of three elements:

1. A straightforward down-payment of immediate savings.
2. Instructions to congressional committees to report legislation achieving specified savings targets and policy objectives.
3. A process for consideration of implementing legislation with strong enforcement mechanisms.

The Gang has been working on this proposal for many months, and significant parts of it are based on or similar to current or past legislative proposals and existing procedures.

While it is true that there are details that may still require careful thought and consideration as they are fleshed out into legislative language, the basic components of each element are relatively straightforward and to a large extent can be drafted by incorporating or building on existing proposals and procedures. The downpayment consists mainly of provisions that have been proposed before, while the process -- instructions to committees -- resembles the reconciliation instructions that can be included in a budget resolution under the regular budget process (with some innovations). But because much of what the Gang proposes is instructions, the arduous task of drafting and scoring an entire $4 trillion proposal is handed over to the committees and deferred for several months.

In terms of scoring, there is very little in the legislation which actually requires a CBO score. The downpayment consists mainly of a repeal of the CLASS Act (which CBO has already scored as costing $86 billion), a move to the chained CPI (which has also been scored by CBO numerous times), and discretionary spending caps which can be estimated easily through a simple CBO formula that converts budget authority into outlays.

The rest of the legislation is largely instructions to committees with (enforceable) savings targets. If policymakers need our help estimating the savings from this part, we are happy to lend a hand. Requiring the Agriculture Committee to find $11 billion in savings will save $11 billion. Requiring the HELP Committee to find $70 billion in savings will reduce the deficit by $70 billion. And so on. If legislators want an understanding of what the savings targets would mean in terms of policy changes, they can look to the Fiscal Commission report. The savings targets in the Gang of Six are broadly consistent with the savings from the policies contained in the Commission report. While the Gang of Six proposal doesn’t require committees to adopt the exact proposals put forward by the Commission, the Commission report demonstrates that the savings targets are realistic and provide a guide as to how they could be achieved.

We think that even if these instructions were negotiated to different levels, from $11 billion to $15 billion, and $70 billion to $80 billion, say, we could run the new numbers through our complex model to estimate the potential savings. (Yup, done, $15 billion and $80 billion.)

So if the only real problem is writing this into law and scoring it, this is not much of a problem at all.

The Gang of Six proposal recognizes that big reform takes time and requires expert attention. Rather than dictate precisely where deficit reduction should come from, therefore, the package asks the committees of jurisdiction to work out the exact details. Instead of a few insiders coming up with a fait accompli behind closed doors with little input from the outside, the Gang approach would facilitate a transparent process where congressional committees would devise deficit savings through an open, but not open-ended, process allowing input from all sectors. The committees would have plenty of ideas to work from given the Fiscal Commission and other proposals (check out CRFB's interactive comparison grid to see all the plans). The Gang approach provides a framework for ensuring that these decisions are made in a focused and expedited manner.

If, however, there is a desire to have an agreement on the policy details up front instead of directing committees to develop savings, this would be one of those moments where we could lift the debt ceiling for a short amount of time while negotiators work out the details, as has been done in the past. The ticking clock is no reason to give up on the 'Grand Bargain' that would actually fix our budget problems.

We have an incredible opportunity here that we should not miss. Now's not the time for excuses or delays, it’s the time for action.