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This month, two blue-ribbon commissions were to have issued important reports on critical economic policy issues. One of these two commissions, the President’s fiscal responsibility commission, surpassed all reasonable expectations, delivering an 11-7 vote in favor of a bold, controversial package of recommendations. The other, the Financial Crisis Inquiry Commission (FCIC) is essentially disintegrating, a majority of its members having refused even to comply with its statutory reporting deadline. The divergent fates of the two commissions represent a case study in what makes commissions succeed or fail.
As a former Executive Director myself of a presidential commission – unfortunately, one that did not see its recommendations enacted into law – I am sometimes asked to analyze the factors that enable a commission to succeed. To understand those, we must define what constitutes “success.”
Hypothesis: A commission is successful if it develops recommendations that are to a significant extent reflected in subsequent legislation. Some assert that the President’s fiscal responsibility commission “failed” because it did not garner the 14 votes required under its charter to approve recommendations. I would argue, however, that this is not the right test of a commission. The point of a commission is to effect changes in national policy, not to meet what may have been an unrealistic super-majority threshold within the commission.
We must remember, for example, that the Greenspan Commission “failed” to supply Congress with a unified recommendation for a complete Social Security solvency solution. It is nevertheless considered a success because the Greenspan commission’s work facilitated subsequent Congressional action (in which legislators selected from options the commission had presented).
By this standard, the Simpson-Bowles fiscal commission has taken the steps required to ultimately be viewed as a success. It is expected, for example, that some of its recommendations for discretionary spending cuts and budget process reforms may appear in future Congressional budgets. On both Social Security reform and tax reform, the commission developed frameworks for a potential bipartisan accord. If the President and Congress choose not to take these up, this would be a discretionary policy choice by elected officials rather than a true commission failure. The White House is even now assembling a budget that will be publicly scrutinized for how many of the commission’s proposals that it contains. In these and possibly other ways, the Simpson-Bowles commission is already having a policy influence.
I believe that the essential ingredients of a successful commission are these:
- Prior bipartisan agreement that a policy problem must be solved;
- Prior bipartisan agreement that the normal political and legislative channels will not solve it fast enough;
- Commission membership that is credible with legislators on both sides of the aisle;
- Skillful leadership within the commission, supplemented by adequate support from the White House and from Congress.
#1 and #2 of these should be self-explanatory. Commissions aren’t appointed if Congress and the President both believe that an issue can be handled via normal legislative channels alone. Moreover, if one side or the other feels that a problem can be left unresolved for the time being, it becomes much harder for a commission to succeed. This is what distinguished the Greenspan Social Security Commission, for example, from the Kerrey-Danforth Entitlement/Tax Reform Commission and from the Breaux-Thomas Medicare Reform Commission. The problem that Kerrey-Danforth and Breaux-Thomas both faced was that, while many members on both sides acknowledged that they were wrestling with severe policy problems, hardly anyone felt that Armageddon would immediately transpire if the problems weren’t solved right then, and specifically through the commission process. By contrast, both sides perceived that if the Greenspan Commission collapsed in failure, the Social Security program might collapse right along with it.
Perhaps the toughest factor to handle appropriately is factor #3 – credible commission membership. Composing a commission is a delicate balancing act. When a commission consists of too many members of Congress – such as the Kerrey-Danforth commission – it often simply replicates the ongoing Congressional stalemate. But if, on the other hand, a commission has no sitting members of Congress – such as President Bush’s 2001 Social Security Commission (which I served), or the current FCIC – Congress is often content to let its work pass without further action. A bipartisan appointment process (such as that established by President Obama for his fiscal commission) has historically also contributed to a commission’s credibility.
With the fiscal commission, President Obama appears to have struck a nearly-optimal balance between Congressional involvement and the cover of outside figures. With such members as Senator Judd Gregg (R-NH), Congressman Paul Ryan (R-WI), Senator Kent Conrad (D-ND) and Congressman John Spratt (D-SC), Congress could not wholly ignore it. Yet at the same time, the commission included key individuals now outside of Congress – including not only co-chairs Erskine Bowles and Alan Simpson, but others such as former CBO Director Alice Rivlin – to provide both intellectual cover and evidence of political independence. The 1981-83 Greenspan Commission similarly blended individuals from inside and outside of Congress.
In the end, however, there is simply no substitute for effective, bipartisan commission leadership. This more than anything else distinguished the President’s fiscal responsibility commission from the FCIC.
In the case of the president’s fiscal commission, this leadership was essential to overcome substantial handicaps. Congressional Republicans were deeply skeptical of the commission at the time of its formation, seeing it largely as a means for the White House to solicit an “independent” recommendation to raise taxes. Reports had circulated then that Republicans were considering not even naming members to it. Republican skepticism about the White House’s general economic policies hasn’t receded one bit since the commission was formed, yet Simpson and Bowles still managed to position the commission as genuinely independent of both the White House and Congressional leadership. This was no small accomplishment.
How did this happen? With painstaking work by the commission co-chairs, its members and its staff. The co-chairs earned the trust of their members on both sides by maintaining confidences during repeated consultations. Reading the fiscal commission’s final report, it’s clear that they not only consulted their diverse membership but they listened to them. On the Social Security provisions, for example, the co-chairs took seriously the left’s emphasis on protecting vulnerable low-income populations, as well as the right’s emphasis on containing cost growth. On tax reform, they listened to the left’s complaints about runaway tax expenditures, and to the right’s complaints about high marginal tax rates. Their final recommendations embraced what different sides described as their highest priorities.
Contrast this with the comedy of errors that the FCIC has become. Instead of the two co-chairs linking arms and hammering out a document reflecting the diverse insights of their commission members, the effort of the commission majority has been to develop a document only to validate a partisan view of the financial markets crisis. The tactics employed toward this end have grown absurd, and are destroying whatever credibility the FCIC might have had.
First, on a party-line vote, the FCIC voted to ignore their statutory reporting deadline and to defer their final report until January. Subsequently, another party-line vote limited the commission’s minority members only to nine pages each for their views in a 512-page commercially-available report. And most recently, we have had the spectacle of at least one individual commission member leaking caricatured renditions of other members’ views to the Huffington Post. Suffice it to say, this is far afield of the methods employed by Simpson and Bowles.
As a result, the FCIC is set to release a January report that will be rightly dismissed as a partisan exercise, whereas the serious proposals developed by the Simpson-Bowles commission will likely influence our fiscal decisions for months if not years to come. This is a case study in the difference that leadership makes.
Charles Blahous serves as one of the two public trustees for the Social Security and Medicare programs. He is also the author of Social Security: The Unfinished Work.