If We Only Had a Baker-Hamilton Commission on Fiscal Policy

David Wessel is a national treasure:

The numbers in President Bush’s budget add up – arithmetically. If his assumptions come true, the deficit will evaporate in 2012. But there are a lot of ifs – if Iraq and Afghanistan cost only $50 billion in 2009 and nothing thereafter; if the president and Congress hold growth in annually appropriated domestic spending well below inflation; if they let the alternative minimum tax reach deeper into the middle class or raise taxes on others to prevent that; if Congress squeezes $66 billion (4%) from Medicare over five years. OK … William Gale of the Brookings Institution think tank – populated by deficit-fearing Democratic wonks who have been trying to find common ground with deficit-fearing Republican wonks – has been thinking a lot lately about the parallels between Mr. Bush on Iraq and Mr. Bush on the budget. “The Bush administration’s two signature policies have been the war in Iraq and consistent pressure for tax cuts,” he argues. “On the surface, they look quite different and were advocated by different parts of the administration. Look a little deeper and some common patterns emerge — so maybe this says something about the principles or management style of the Bush administration.” It is a provocative and illuminating exercise. Let Mr. Gale kick it off: The president took the U.S. into Iraq with “falsely rosy scenarios” about the post-Saddam landscape there, he says. Mr. Bush built his tax cuts in 2001 on a similarly unrealistic hope that the budget surplus was large enough to cut taxes without creating deficits. Let us keep going. As Iraq proved different and more difficult than anticipated, and contingency planning was regarded by the Bush White House as a sign of weakness, rather than prudence, Mr. Bush vowed to “stay the course.” When then-Treasury Secretary Paul O’Neill and Federal Reserve Chairman Alan Greenspan argued for “triggers” to undo tax cuts if budget reality didn’t match projections, the White House scoffed. Even when the Sept. 11, 2001, attacks and the wars in Iraq and Afghanistan drove spending on homeland security and the military far above projections, Mr. Bush didn’t revisit his fiscal strategy. Smart critics, even inside the administration, were disregarded and shunned. (Gen. Eric Shinseki on troops levels in Iraq, Treasury Secretary O’Neill on deficits.) Only true believers remained to give the president advice. Eventually, Mr. Bush changed his team — hiring new secretaries of defense and Treasury – but too late to get credit from the public or to forge bipartisan consensus in Congress.

Say what you want about Paul O’Neill’s performance as Treasury Secretary. While he was not Robert Rubin, the reason he was fired was that he refused to drink any more Kool Aid. David finishes the parallel with:

But look ahead, and there is an unwelcome parallel between Iraq and the budget. Current policy is unsustainable, but there is no easy way out. Extend the president’s tax cuts beyond their scheduled expiration in 2009 and 2010, and the fiscal hole is enormous. Let them expire, and the tax increases could derail the economy. Messrs. Baker and Hamilton had little apparent effect on the president’s Iraq policy. Maybe they would have better luck on economics.

OK – James Baker and Lee Hamilton are not economists. But they have been plenty of economists, such as William Gale, willing to offer their advice on fiscal policy. If we had such a commission, would we have any more expectations that this President would pay any attention to its recommendations? No – we have to bide our time for another couple of years until we have a real President in the White House.