Jim Thompson and Travis Hale
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Government Commissions
Travis says: On 26 January 2010, the U.S. Senate rejected the Bipartisan Task Force for Responsible Action Act of 2009 (Conrad-Gregg). Conrad-Gregg would have created "a commission of eight Democrats and eight Republicans from the Congress and two members from the Administration, who would be charged with making bipartisan recommendations to Congress on how to return the country to fiscal stability. These recommendations would be fast-tracked through Congress and guaranteed an up-or-down vote." (See here and here for more.)
Both ideological extremes rejoiced in the defeat of Conrad-Gregg. Liberal groups derided the deficit commission as undemocratic and conservatives feared that any consensus would include both spending cuts (for which conservatives would rejoice) and tax increases (which conservatives hate). Some in the anti-tax crowd would accept a spending-only commission, but that would likely be a nonstarter for Democrats.
The model for Conrad-Gregg comes from the successful Defense Base Closure and Realignment Commission (BRAC) and the questionably successful Greenspan Commission on Social Security. BRAC developed from a post-Cold War need to consolidate U.S. military operations. Congress knew they needed to close some bases, but if the process went through the normal committee hearings and backroom dealings, it would be nearly impossible for any agreement to come together – what Congressperson would vote for closure of a base in their own district? The Greenspan Commission was a Reagan initiative to keep Social Security solvent. Whether the Commission itself or a rare détente between Reagan and Tip O'Neill was responsible, the result kept Social Security afloat another quarter century.
Many, many other government commissions have come before – such as the 9/11 Commission – or still exist – like the U.S. Commission of Fine Arts. Most have very little influence on national policy. Critics argue that commissions give politicians cover ("we know there's a problem, and we're looking for answers") when their real aim is to maintain the status quo and put off any hard decisions indefinitely.
When advocacy groups ranging from Americans for Tax Reform to MoveOn.org stand united against something, it deserves a second look. Frankly, I like the idea of a bipartisan commission on deficit reduction, and I especially like the idea of fast-tracked legislation that gets an honest up-or-down vote instead of endless parliamentary delay. As it stands, meaningful reform is nearly impossible. Entitlement spending makes up the lion's share of the budget. Democrats do not want to incur the wrath of the AARP by proposing benefit cuts or lengthening the age to retirement, Republicans refuse to accept their own responsibility for the Bush deficits and refuse to enact tax increases, regardless of the intergenerational unfairness of the current system. Any real solution would have to rein in spending and boost revenues. I doubt whether a bipartisan commission could come up with the supermajority necessary (14 of 18 Commissioners would have to support a final plan), but simply going through the exercise might awaken the electorate to the real challenges that lie ahead.
For one, I'd like to hear your thoughts on government commissions, particularly a deficit commission – undemocratic and ill conceived or potentially useful? Second I wonder if you see any links between the role of the commission and the consultant. It strikes me that firms might sometimes hire a consultant to tell them the bad news that they already know but do not want to admit. As is the case with government commissions, the consultant brings outside knowledge to a specific set of problems and gives decision-makers the opportunity to make unpopular decisions based on expert guidance.
Jim says: I would like to start with the financial condition of the United States before I respond to your specific questions.
The financial condition of the United States is at a crisis stage, and it really makes no difference who we blame for it. In truth, the last and only time the United States had no debt was in the administration of Andrew Jackson, a very long time ago. In Jackson's time, Alexis de Tocqueville stated, in his famous study of the phenomenon of the United States (and I am paraphrasing here), "this democracy in America will work until the people figure out they can vote themselves money." We have reached that point, and it has clearly become a nonpartisan issue. All elected to Washington are guilty as are we who elect them. We are self-destructing.
How clueless we are was related recently in a story told to us by a friend whose relative works in mortgage foreclosure department at a large national lender. Corresponding with a party that had only made a few payments on a house they purchased, the "homeowner" said they had sent their mortgage account number and such details to Mr. Obama and they were sure the lender would be getting a check from Mr. Obama soon. This problem obviously started with our education system (if one goes back and reads the history, they will find our public education system was put in place solely to provide an educated voter population).
This debt crisis will end, the only question is do we have enough time left and the will to bring it to a stable close or will it end badly (think of hyperinflation in Germany in the 1920s and what came out of that). The proven stable solution is to cut taxes and concurrently cut government services faster than one cuts taxes. My concern is no one, no matter their partisan label, will have the stomach to do this. I lay awake at night wondering what kind of world your son, my grandson, will live in as an adult. I find the prospects for him extremely bleak, but hope I am wrong.
On to government commissions. I find them no more or less democratic than anything else we do. We live in a representative republic, not a pure democracy, so I don't think it makes any difference.
The base closure commission you referenced, BRAC, is probably one of the most successful commissions in recent times. Most others are worthless. Even the Warren Commission, which investigated the murder of John F. Kennedy, an event that took place in broad daylight with literally hundreds of eye witnesses, was not very successful -- its conclusions are still questioned to this day.
I am opposed to the deficit reduction commission because it is a duplication of efforts. Congress is charged with budgetary matters, and if they cannot get it right, then we should fire them (except they keep giving us money, see de Tocqueville, above). Again, we are self-destructing.
As for commissions in general, sometimes (rarely) it is appropriate to appoint a side group to study a subject while regular business is carried on by an entity. But as you rightly point out, such groups are often created merely to refocus blame. Hence my dim view of them.
And, perspicaciously, you are absolutely correct about consulting assignments whose purpose is to opine on a set of circumstances. There is a definite link to commissions and one that is a struggle for the opining consultant (that has any sense of ethics and professionalism). However, you missed one little point -- those who hire consultants to divert blame like very much to hire the big "brand name" ones. In this way, when things go wrong, they can always say, "Well, we hired mega consultancy, what else could we do?" As a boutique consultant, I compete with this daily. But in reality, if someone is hiring a consultant for this reason, I much prefer to lose the assignment than become entangled in their game playing.
Sometimes, however, those who hire consultants are as clueless as the homeowner I cited earlier. A friend of mine that does some consulting says he is tired of telling people what they need to do only to have his advice ignored. It is as if they want to continue the management behaviors they have been exhibiting and expect him to come up with some magical formula to solve their problems. Doesn't work.
Once in a while we all, as citizens, managers, people have to face the bad news and act on it in a way we have not done before. Several such decisions face all of us right now.
Travis replies: My feelings on "the financial condition of the United States" are muddled. Economists I respect see the current spate of debt hysteria as overblown and a particularly partisan phenomenon. We should remember that there are better and worse reasons to take on debt. I would support a large jobs bill and another round of fiscal stimulus – particularly one that focuses on crumbling infrastructure. Investing in job creation now could well lead to increased revenue in the future. Furthermore, doing what we can to reduce joblessness will avert real pain.
On the other hand, it is clear that the budget is imbalanced towards healthcare and retirement expenses that are unsustainable. Common sense measures include ratcheting up the age for which seniors begin receiving Social Security payments, in recognition that life-expectancy has risen, and enacting meaningful healthcare reform. There are plenty of good conservative and progressive ideas that would help restore fiscal discipline to the federal budget, but it will take a political will and bipartisanship to move any important measures forward. As Quixotic as it may appear, a deficit commission may be our best hope.
Travis says: On 26 January 2010, the U.S. Senate rejected the Bipartisan Task Force for Responsible Action Act of 2009 (Conrad-Gregg). Conrad-Gregg would have created "a commission of eight Democrats and eight Republicans from the Congress and two members from the Administration, who would be charged with making bipartisan recommendations to Congress on how to return the country to fiscal stability. These recommendations would be fast-tracked through Congress and guaranteed an up-or-down vote." (See here and here for more.)
Both ideological extremes rejoiced in the defeat of Conrad-Gregg. Liberal groups derided the deficit commission as undemocratic and conservatives feared that any consensus would include both spending cuts (for which conservatives would rejoice) and tax increases (which conservatives hate). Some in the anti-tax crowd would accept a spending-only commission, but that would likely be a nonstarter for Democrats.
The model for Conrad-Gregg comes from the successful Defense Base Closure and Realignment Commission (BRAC) and the questionably successful Greenspan Commission on Social Security. BRAC developed from a post-Cold War need to consolidate U.S. military operations. Congress knew they needed to close some bases, but if the process went through the normal committee hearings and backroom dealings, it would be nearly impossible for any agreement to come together – what Congressperson would vote for closure of a base in their own district? The Greenspan Commission was a Reagan initiative to keep Social Security solvent. Whether the Commission itself or a rare détente between Reagan and Tip O'Neill was responsible, the result kept Social Security afloat another quarter century.
Many, many other government commissions have come before – such as the 9/11 Commission – or still exist – like the U.S. Commission of Fine Arts. Most have very little influence on national policy. Critics argue that commissions give politicians cover ("we know there's a problem, and we're looking for answers") when their real aim is to maintain the status quo and put off any hard decisions indefinitely.
When advocacy groups ranging from Americans for Tax Reform to MoveOn.org stand united against something, it deserves a second look. Frankly, I like the idea of a bipartisan commission on deficit reduction, and I especially like the idea of fast-tracked legislation that gets an honest up-or-down vote instead of endless parliamentary delay. As it stands, meaningful reform is nearly impossible. Entitlement spending makes up the lion's share of the budget. Democrats do not want to incur the wrath of the AARP by proposing benefit cuts or lengthening the age to retirement, Republicans refuse to accept their own responsibility for the Bush deficits and refuse to enact tax increases, regardless of the intergenerational unfairness of the current system. Any real solution would have to rein in spending and boost revenues. I doubt whether a bipartisan commission could come up with the supermajority necessary (14 of 18 Commissioners would have to support a final plan), but simply going through the exercise might awaken the electorate to the real challenges that lie ahead.
For one, I'd like to hear your thoughts on government commissions, particularly a deficit commission – undemocratic and ill conceived or potentially useful? Second I wonder if you see any links between the role of the commission and the consultant. It strikes me that firms might sometimes hire a consultant to tell them the bad news that they already know but do not want to admit. As is the case with government commissions, the consultant brings outside knowledge to a specific set of problems and gives decision-makers the opportunity to make unpopular decisions based on expert guidance.
Jim says: I would like to start with the financial condition of the United States before I respond to your specific questions.
The financial condition of the United States is at a crisis stage, and it really makes no difference who we blame for it. In truth, the last and only time the United States had no debt was in the administration of Andrew Jackson, a very long time ago. In Jackson's time, Alexis de Tocqueville stated, in his famous study of the phenomenon of the United States (and I am paraphrasing here), "this democracy in America will work until the people figure out they can vote themselves money." We have reached that point, and it has clearly become a nonpartisan issue. All elected to Washington are guilty as are we who elect them. We are self-destructing.
How clueless we are was related recently in a story told to us by a friend whose relative works in mortgage foreclosure department at a large national lender. Corresponding with a party that had only made a few payments on a house they purchased, the "homeowner" said they had sent their mortgage account number and such details to Mr. Obama and they were sure the lender would be getting a check from Mr. Obama soon. This problem obviously started with our education system (if one goes back and reads the history, they will find our public education system was put in place solely to provide an educated voter population).
This debt crisis will end, the only question is do we have enough time left and the will to bring it to a stable close or will it end badly (think of hyperinflation in Germany in the 1920s and what came out of that). The proven stable solution is to cut taxes and concurrently cut government services faster than one cuts taxes. My concern is no one, no matter their partisan label, will have the stomach to do this. I lay awake at night wondering what kind of world your son, my grandson, will live in as an adult. I find the prospects for him extremely bleak, but hope I am wrong.
On to government commissions. I find them no more or less democratic than anything else we do. We live in a representative republic, not a pure democracy, so I don't think it makes any difference.
The base closure commission you referenced, BRAC, is probably one of the most successful commissions in recent times. Most others are worthless. Even the Warren Commission, which investigated the murder of John F. Kennedy, an event that took place in broad daylight with literally hundreds of eye witnesses, was not very successful -- its conclusions are still questioned to this day.
I am opposed to the deficit reduction commission because it is a duplication of efforts. Congress is charged with budgetary matters, and if they cannot get it right, then we should fire them (except they keep giving us money, see de Tocqueville, above). Again, we are self-destructing.
As for commissions in general, sometimes (rarely) it is appropriate to appoint a side group to study a subject while regular business is carried on by an entity. But as you rightly point out, such groups are often created merely to refocus blame. Hence my dim view of them.
And, perspicaciously, you are absolutely correct about consulting assignments whose purpose is to opine on a set of circumstances. There is a definite link to commissions and one that is a struggle for the opining consultant (that has any sense of ethics and professionalism). However, you missed one little point -- those who hire consultants to divert blame like very much to hire the big "brand name" ones. In this way, when things go wrong, they can always say, "Well, we hired mega consultancy, what else could we do?" As a boutique consultant, I compete with this daily. But in reality, if someone is hiring a consultant for this reason, I much prefer to lose the assignment than become entangled in their game playing.
Sometimes, however, those who hire consultants are as clueless as the homeowner I cited earlier. A friend of mine that does some consulting says he is tired of telling people what they need to do only to have his advice ignored. It is as if they want to continue the management behaviors they have been exhibiting and expect him to come up with some magical formula to solve their problems. Doesn't work.
Once in a while we all, as citizens, managers, people have to face the bad news and act on it in a way we have not done before. Several such decisions face all of us right now.
Travis replies: My feelings on "the financial condition of the United States" are muddled. Economists I respect see the current spate of debt hysteria as overblown and a particularly partisan phenomenon. We should remember that there are better and worse reasons to take on debt. I would support a large jobs bill and another round of fiscal stimulus – particularly one that focuses on crumbling infrastructure. Investing in job creation now could well lead to increased revenue in the future. Furthermore, doing what we can to reduce joblessness will avert real pain.
On the other hand, it is clear that the budget is imbalanced towards healthcare and retirement expenses that are unsustainable. Common sense measures include ratcheting up the age for which seniors begin receiving Social Security payments, in recognition that life-expectancy has risen, and enacting meaningful healthcare reform. There are plenty of good conservative and progressive ideas that would help restore fiscal discipline to the federal budget, but it will take a political will and bipartisanship to move any important measures forward. As Quixotic as it may appear, a deficit commission may be our best hope.