The two Republicans vying to take over from House Budget Committee Chairman Jodey Arrington (R-TX) are pushing hard for a bipartisan fiscal commission to close federal deficits, with both of them saying that all options, including revenue raisers, are on the table.
Their positioning represents a break with the stance of many Republicans in years past that tax hikes should not be in consideration.
The Washington Examiner interviewed Reps. Lloyd Smucker (R-PA) and Blake Moore (R-UT) to discuss their visions for the committee if chosen to be either chairman, if Republicans retain control of the House in November, or the ranking member, if the GOP loses. Both congressmen vowed to pursue a fiscal commission tasked with addressing the rising federal debt should they get the gavel.
GRIM $40 TRILLION DEBT MILESTONE RAISES QUESTIONS ABOUT FISCAL COMMISSION
“My view is that this will need to be done on a bipartisan basis,” Smucker said. “I don’t think we can fix Social Security with one party alone. We all have to want to fix this and ensure that it is sustainable.”
Proponents of a fiscal commission say the the measure is needed because of the towering $40 trillion debt, the higher costs of servicing that debt, and the looming exhaustion in the coming years of the trust funds for Social Security and Medicare.
For instance, the Social Security retirement trust fund will be exhausted in 2032, earlier than previously anticipated, the program’s trustees projected earlier this year, meaning that senior citizens would face a cut in their benefits at that time unless Congress acts.
“There’s no way around it — we have to reform these programs if we want to save them, if we want to make them more sustainable, we have to do it,” Moore said.
And when it comes to a fiscal commission, neither Smucker nor Moore said revenue raisers are a nonstarter. Outside advocates for fiscal restraint have pushed for a combination of spending cuts and tax increases in order to sustainably lower debts and deficits, and both of the congressmen said all options are on the table.
One tax increase that has gained interest from some Republicans would be raising the cap on payroll taxes. Currently, the tax of 12.4%, split between employees and employers, applies only to the first $184,500 of an individual’s wages.
“There’s going to be a lot of opinions about whether it should affect benefits and whether it should include revenue, and I think it has to be some package that doesn’t exclude the idea of potentially increasing the payroll cap,” Smucker said.
“And I would be open to that in the right package that ensures that it’s sustainable,” he added.
When asked about raising the payroll tax cap, Moore said that “all options are on the table,” but emphasized that in no way is that an all-encompassing fix.
“What I don’t subscribe to is this nonsensical illusion that I see from my Democrat colleagues that you can just raise the cap and everything’s going to be hunky-dory,” Moore said. “That’s not the case. You have to fundamentally reform these structures so they can meet the needs of the next generation.”
Notably, Sen. Bernie Moreno (R-OH) recently called for a tax increase on higher earners to safeguard Social Security.
Moreno, one of the more populist members of Congress, endorsed a plan alongside Sen. Elizabeth Warren (D-MA) that calls for removing the Social Security payroll tax cap. They said doing so would infuse the Social Security program with around $3 trillion, which they argue would help stabilize the entitlement program.
Signing off on a tax hike of that magnitude, or any tax increase at all, would represent a break with the anti-tax orthodoxy of the GOP of the past few decades. Most Republicans, including Moreno, have signed the Americans for Tax Reform pledge to oppose any and all tax increases. Still, Moreno told the Washington Examiner that constituents “love” the push.
A fiscal commission, though, would not focus solely on revenue increases. It would likely also contemplate a range of measures to reduce spending, such as by raising the retirement age, which some argue should be increased given longer life expectancies. Smucker said that could be one tool in a bigger toolbox when it comes to a fiscal commission.
“There’s already a retirement age that has been increasing gradually for a certain cohort, and that’s one of the changes you could make, and that would seem to make sense because people are living longer,” he said.
Both congressmen stressed the need to educate the public on the need for a fiscal commission. Moore also pointed out that outside interest groups have worked against fiscal commissions.
“It’s a horrible problem, and it is an education issue,” Moore said. “And then you have groups like AARP out there, you know, getting people to sign on to a letter in opposition of a fiscal commission.”
Smucker said he has heard more concern on the campaign trail about the matter, but hopes to see the public put more pressure on lawmakers to act.
“I want them to be calling into their members of Congress and asking them to fix the debt and to fix Social Security to make sure it’s sustainable and to be sure that we can keep the promises that we’ve been making,” Smucker said.
Past commissions have had mixed results. One success that some point to is the Greenspan Commission, which helped Social Security maintain financial stability in the early 1980s. House Financial Services Committee Chairman French Hill (R-AR) recently mentioned that experience when asked about commissions by the Washington Examiner.
“I’ve always supported for years a balanced budget amendment to the Constitution,” Hill said. “I’ve always supported a bipartisan approach that can be used to resolve some of the mandatory spending challenges. That was successfully done in 1983 in the Greenspan Social Security Commission.”
Still, the Greenspan Commission wasn’t organized years in advance of key deadlines, and instead was convened at the last minute after estimates were that the Old-Age and Survivors Insurance Trust Fund would soon run out of money.
Moore said the approaching deadlines for the exhaustion of entitlement program trust funds in the early 2030s are much more dire than back in the 1980s and that Congress should not be waiting until the last minute to act.
“We’re in a far worse fiscal situation than we were back then to make some tweaks and changes,” Moore said. “I mean, this would be a catastrophic calamity if we got to this point and we try to fix it overnight; we need five, six years out ahead of it.”
Smucker emphasized the importance of the Budget Committee, especially at a time when the federal government’s finances are in such disarray.
“We’re, if you will, sort of helping to guide the rest of the conference, kind of the conscience of the conference in terms of these fiscal issues, and that certainly would be my goal going forward,” he said.
REPUBLICANS RECKON WITH POSSIBILITY OF BIPARTISAN FISCAL COMMISSION TO CLOSE DEFICITS
But Moore said in addition to a fiscal commission, he would try to use the reconciliation process, a special budgetary procedure that allows for bypassing the filibuster and passing legislation with only a simple majority in the Senate, to help address some fiscal matters, such as cutting down on fraud. Most major partisan fiscal legislation in recent years has been passed using reconciliation.
“So, there will be a two-pronged approach — fiscal commissions, I think, are a very, very awesome opportunity, and there’ll be some reconciliation cases to be made with other things that can reduce our deficit,” Moore said.