A Sensible Road to Fiscal Sanity
How Respecting the Views and Work of Others Can Avert Our Fiscal Crisis
Welcome to the Civic Way journal, our quick take on the relevance of current events to America’s future governance. The author, Bob Melville, is the founder of Civic Way, a nonprofit dedicated to good government, and a management consultant with over 45 years of experience improving public agencies.
Above all, bipartisanship means talking to your political adversaries – and, more importantly, listening. – James Baker
An Emerging Bipartisan Consensus?
Looking past the fiercely ideological—and counterproductive—publicity stunts of DOGE’s vainglorious leaders, a potential bipartisan consensus on the debt issue is emerging. And it may be worth the wait, especially if DOGE fails to fulfill its promise.
Most Republicans—their thirst for unfunded tax cuts notwithstanding—want a balanced budget. In fact, most Republicans, at least in the abstract, care deeply about fiscal stewardship. They understand the risks inherent with excessive, unmanaged debt. Some even grasp that our nation’s debt may be too large to be eliminated with efficiency measures and visions of economic growth.
Most Democrats, if not deficit hawks, want a viable federal government. Most, at least theoretically, know that habitual deficits pose a threat to their favorite programs. And left-leaning economists are joining their ranks. Larry Summers, a former Treasury Secretary and deficit agnostic, recently suggested, “we’re on a completely unsustainable path.” Even Paul Krugman[i], a long-time deficit dove, wrote in late 2023 that we must “rein in budget deficits.”
Our Past Bipartisan Successes
If history is any guide, our nation knows how to solve problems like today’s debt crisis. Since 1983, there have been 13 or 14 “grand bargain” fiscal negotiations of which nearly half produced consequential law. The bipartisan successes offer relevant guidelines for our elected representatives today.
1983 Social Security reform – President Reagan and Speaker O'Neill appointed a bipartisan commission, chaired by Alan Greenspan, to save the system. The Reagan-O’Neill compromise raised the retirement age from 65 to 67, delayed the cost-of-living adjustment and required contributions from government employees. The deal kept the system's trust fund solvent for over 50 years.
1990 Budget Enforcement Act – President Bush (41) worked with Democratic leaders in Congress to update deficit targets, set enforceable discretionary spending caps and institute a “Pay-As-You-Go" (PAYGO) mechanism requiring the funding of new cost increases or tax cuts[ii]. The deal reduced the deficit with revenue increases and cost reductions[iii].
1993 National Performance Review (REGO) – Under President Clinton, VP Gore led a five-year reform effort and a large team of professional analysts that yielded $136 billion in savings and many efficiencies, including closed offices, streamlined regulations, improved operations, modern procurement, customer service standards and performance metrics.
1993 Omnibus Budget Reconciliation Act – President Clinton won passage of a budget reduction bill over Republican and Democrat objections. The act increased individual income, corporate income and fuel taxes, authorized $255 billion of spending cuts over five years, and helped the federal government realize its first budget surplus since 1969[iv].
1997 Balanced Budget Act – President Clinton and Speaker Gingrich increased Medicare premiums, cut spending by $160 billion over ten years (mostly Medicaid benefits) and led to four years of consecutive balanced budgets[v].
The 2010 Simpson-Bowles Commission on Fiscal Responsibility, created under President Obama, did outstanding work. It made several far-sighted recommendations for reforming the federal government and reducing deficits, but these ideas died, never having been championed by Democratic and Republican leaders. It was a generational opportunity lost.
Together, these bipartisan initiatives offer three critical lessons for today’s leaders. First, success requires strong bipartisan leadership—and an ironclad vow not to attack each other’s ideas. Second, both parties must challenge their political bases and forge a compromise legislative package that fairly distributes the ideological pain. Finally, the legislative package must be enforceable and long-term—at least five years, but preferably 10 or 20 years[vi].
Sometimes you must do … the right thing and … pay the political price. That’s called leadership. – James Baker
Winning broad congressional support for any reform is hard. With increasingly gerrymandered (and "safe") congressional districts, a fragmented, hyper partisan media landscape and a polarized electorate, bipartisan consensus is more elusive than ever. The question is, do we have two partisan leaders, like Reagan and O’Neill, who will rise to the bipartisan challenge, and put their nation first?
Will DOGE Ball Have Any Winners?
For better or worse, the debt reduction ball is now in DOGE’s court. President-Elect Trump charged the DOGE commission with confronting the debt issue. We should hope that it is up to the task, but the question lingers, will DOGE be the vehicle we need to eliminate the deficits and debt?
The early signs are inauspicious. This week, Musk conceded that his initial goal of cutting the federal budget by “at least $2 trillion” might be unrealistic, but “if we try for $2 trillion, we’ve got a good shot at getting one [trillion].” Cold comfort for those alarmed about the federal debt.
Perhaps the initial exuberance of DOGE’s co-leaders has given way to an awareness of the obstacles they face. That pursuing more tax cuts and protecting entitlement benefits will impair bipartisan legislation action. That persuading a narrowly divided Congress to support extreme cost cutting concepts—without considering revenues and entitlements—will prove futile. That, as suggested by Iowa Senator Grassley, relying solely on executive action is more manageable.
Limiting its scope to executive actions will prevent DOGE from fully solving the debt issue, but not from urging modest measures for closing the gap. Tightening revenue collections. Expanding performance audits. Monetizing unused federal assets. Replacing outdated technologies. Controlling payments. Streamlining cross-agency processes. Recommending a more efficient regulation update mechanism. Revamping the budget management process. As the President-Elect often says, “We will see.”
Why Reinvent the Wheel?
One of the most striking flaws about DOGE’s headline-hunting antics, and the coverage of those antics, has been one of omission. There has been virtually no coverage of what could have been—and still could be—the key to DOGE’s success. That is the fact that much of their work is already done.
In 2024, the Peterson Foundation engaged seven prestigious think tanks[vii] from across the political spectrum to recommend actionable ways to reduce the nation’s projected debt-to-GDP ratio over the next 30 years. It is such a remarkable contribution to the debate, that it should be the first homework assignment for DOGE staff.
These debt reduction proposals, as set forth in the Peterson Foundation’s Solutions Initiative 2024: Charting a Brighter Future, vary as to details, but share two key virtues. First, they are thorough and balanced, addressing entitlement reforms, revenue increases and spending cuts[viii]. Second, they offer a solid foundation for building a long-term debt reduction plan. Together, they offer practical ways to reform taxes, restore Social Security’s viability, streamline Medicare and cut the budget by trillions.
In addition, the nonpartisan Congressional Budget Office (CBO) issues a post-election report every two years. Its most recent report, Options for Reducing the Deficit (2025 to 2034), includes many concrete deficit-cutting ideas: eliminating itemized income tax deductions, instituting a five percent value-added tax (VAT), recalculating Medicare Advantage payments, cutting defense costs and capping per-person Medicaid payments. These measures could reduce the debt by an estimated $9.6 trillion over ten years.
The Committee for Responsible Federal Budget (CRFB), another nonpartisan think tank, has specified $700 billion worth of savings over ten years[ix]. Those measures include boosting IRS tax enforcement capacity and cutting what the CRFB calls “excessive” tax credits. These aren’t the only reputable think tanks upon which DOGE can build its recommendations, but they offer an invaluable departure point. Other sources, including the Government Accounting Office, Inspectors General offices and the Simpson-Bowles Commission, also should be carefully considered.
Closing Thoughts
If the new administration and Congress want DOGE to succeed, they will set some guiding principles based on the lessons of the past. That its leaders and members represent both parties equally. That its members have proven reputations for independence, collaboration and compromise. That its DOGE’s work is fully informed by professional, impartial and objective staff. That it will engage civic leaders with a broad range of values, backgrounds and interests. That it will keep the public informed of its work and public input on viable policy options.
If DOGE wants to solve the nation’s debt crisis, it will stop the theatrics and start taking its job seriously. It will scrutinize untouchables like entitlements. It will objectively examine both revenues and costs. It will strive to equitably distribute the impacts. It will recommend relevant management reforms, like revamping the budget process—and debt ceiling relic. Finally, it will deliver an enforceable ten-year debt reduction plan for Congress to vote up or down.
Ultimately, we voters must take some responsibility for escaping this fiscal morass. We must stop being so damn gullible. Stop relying on a single podcast or media outlet for our information (and start thinking for ourselves). Stop falling for phony gimmicks and theatrics (and demand genuine debt reforms). Stop voting for craven politicians of both parties who refuse to compromise.
Instead, we must start voting for candidates who put solutions—and the nation—ahead of party or ideology. And, if DOGE falls short, we must demand that our elected representatives immediately form a successor—a bipartisan commission that is actually designed to solve the debt crisis.
Thanks Bob. Refreshing to read something truly informative on the topic.
And DOGE ball ... well met. Who would have guessed any serious article on deficit reduction would bring a smile along the way.