Bridging Loans: Truman-up, Mr. President: The federal debt stops here

Thursday, November 11, 2010

Truman-up, Mr. President: The federal debt stops here - Washington Post (blog)

Washington is about to buried in a host of commission reports on the federal debt. It will be the blue-ribbon form of last winter's "snow apocalypse."

The reports will have plenty of grist for congressional consideration. The commissions are led by the best of the best, and the reports will address the big-ticket drivers of the debt: most notably Social Security and Medicare. But there's not going to be much new in the recommendations section per se--Washington already knows what needs to be done. And none of it will be popular. President Ronald Reagan was torn apart in 1981 for pushing immediate Social Security cuts, while President George H.W. Bush lost his job for violating his "no new taxes" pledge in the first of several deals to balance the budget during the 1990s.

The missing piece in all this is an action-forcing device. Without some crisis of world-shaking scope, members of Congress and President Barack Obama will dodge the debt issue.

The 1983 Social Security rescue had just such a device. It was manufactured in 1981 when former Rep. Barber B. Conable, Jr. (R-NY) engineered a bill to limit the inter-fund borrowing that was keeping Social Security from the edge. Conable knew that Americans would never accept a package of painful cuts, tax increases and a bump in the retirement edge unless they believed that their Social Security checks were in jeopardy.

Social Security was never in real jeopardy, however. There was more than enough money in the Medicare trust fund to keep Social Security rolling long enough to reach the already scheduled payroll tax increases needed for solvency.

Nevertheless, the specter of bankruptcy was more than enough to give Congress and the White House the opportunity to act. Given a choice between panic and pain, the nation's political leaders came to consensus. The National Commission on Social Security Reform and its now-tarnished chairman Alan Greenspan provided more than enough political cover to forge the final consensus. "The commission made me do it," many members of Congress said as the final bill moved forward just before the March 1983 recess.

There is no such crisis today. And the public certainly isn't about to rise up in support of painful cuts.

So what might give Congress and the president the courage to act? Another Lehman Brothers collapse? Another grand fall in the stock market? A wave of government failures in Europe? A couple of giant bank failures?

Absent another financial catastrophe, which may well be coming, Obama is the only option. He might not get much out in the end, but at least he'd be on the right side of a big fight. He's rightly criticized for taking half a loaf, if that, on the stimulus package and health care. Perhaps it's time for him to Truman-up. After all, Truman won reelection in 1948 largely because he championed legislation that had no chance of passage. He didn't have a blue-ribbon commission to take the heat. The buck stopped at his desk.

Obama could create a similar narrative for his own reelection. He could call on all Americans to sacrifice for the country and world. And, in doing so, he could etch his name on the list of great presidents. Nothing risked, nothing gained. If Congress still says no, run against it in 2012.

Obama is worn down, perplexed and seemingly determined to reject the dismal message from the midterm disaster. He is also moving quickly to throw the debt issue under the snowplow. He should reconsider. He should embrace the call for action, explain the need for reform to a skeptical public and bet his presidency on the result. That's what presidential leadership is about.

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