Could the Gang of Ten – the loose bipartisan coalition of centrists in the Senate (with an elastic composition that changes depending on the topic under consideration) – bring order and discipline to today’s otherwise chaotic federal spending? today and income decisions?
They have real clout when they act in concert, as shown by the infrastructure deal they brokered last year and many of the group are currently negotiating reforms to the voter count law. But the partisan divide on overall spending, taxation and deficits is wide, and therefore particularly difficult to bridge. Reaching deals between the parties hinges on the willingness of GOP participants to counter their party and raise their revenue in return for Democratic support for spending restraint. If this were a possibility (which, to be clear, there is no evidence that it currently is), there would be ample room to find compromises in principle.
The need to disrupt the status quo is obvious. Washington goes from one budget crisis to another, with many self-inflicted problems. It has been years since the government has operated under a multi-year fiscal plan. Caps on appropriate spending – a feature of the process for most of the three decades – have expired and neither side is asking for their return. Discretionary spending for 2023 and beyond is therefore entirely up for grabs and likely to be decided without considering larger debt or deficit targets. In addition, many important tax and expenditure provisions are set to expire in coming years, including tax rates enacted in 2017 and expanded subsidies for health insurance enrollment enacted in 2021.
The pressure to extend both, fully or partially, will be immense but difficult to achieve outside of bipartisan negotiation.
The damage caused by decades of neglect of basic budget planning now stretches far and wide. Social Security and Medicare are spending on their reserves at alarming rates. The Medicare Hospital Insurance Trust Fund is expected to be depleted in four years and the two Social Security Trust Funds will be insolvent in just over a decade. The Biden administration has yet to engage Congress on these issues.
Then there is the debt outlook, which has never been worse. The federal government embarked on a borrowing spree unprecedented in peacetime. The Congressional Budget Office projects that the federal debt, which currently stands at about 100% of GDP, will reach more than 200% by mid-century. At the end of 2008, it stood at less than 40% of GDP. Over the next decade alone, the government is expected to run a cumulative deficit of more than $15 trillion under the Biden administration’s baseline projections.
For now, the spotlight in the Senate is not on the centrist cabal, but on two of its Democratic regulars, Joe Manchin and Kyrsten Sinema. They are the proponents of the Biden administration’s Build Back Better plan, which Democratic leaders still hope to adopt on a partisan basis. It is possible that such a measure will materialize, but hardly certain.
It’s not Manchin’s preference either. He has made it clear for months that he would prefer to engage with Republicans on a compromise bill. He’s a fiscal hawk, which should make him an ideal deal-making partner in the eyes of Republicans. However, recently he also said he was willing to revisit a Democrat-only measure due to the GOP’s stubbornness over tax hikes. He thinks wealthy, profitable companies should pay more and thinks only Democrats will take that step.
Manchin correctly reads the GOP. Ever since George HW Bush broke his promise of no new taxes, Republicans have made opposition to net tax hikes a red line they will not cross. Even in January 2013, when Senator Mitch McConnell brokered a tax deal with President Obama, the resulting hit to high-income households had to be sold as the result of tax cuts expiring, not rate hikes.
OEven if that claim were exaggerated, there’s nothing wrong with the GOP jealously guarding its brand of tax cuts. The country benefits when the two sides compete for support based on differing budget priorities.
But governing in a democracy also requires compromise, especially when the margins in Congress are tight. Otherwise, conflicting priorities create paralysis and the problems grow bigger and more acute – and perhaps unsolvable.
Many Democrats have their own red lines that complicate negotiations, especially on Social Security and Medicare, but some adjustments are still possible. In 2011, then-Vice President Biden worked with GOP Majority Leader Eric Cantor on a draft deal that included modest rights changes. Both parties have drifted away from the political center over the past decade, but it’s not naïve to think that some Democrats are still open to good-faith bargaining.
It is neither necessary nor realistic to expect the gang of ten to tackle the entire fiscal challenge. These problems are too vast and varied to be solved at the same time. But a small deal would help and could lay the groundwork for future progress.
A a good start for the negotiations could be spending caps for the remaining two years of Biden’s term as well as specific revenue increases (perhaps focused on tougher enforcement and closing loopholes) and spending adjustments. rights that would reduce future deficits by a few hundred billion dollars.
The benefits of reaching agreements would extend beyond the substance of the agreements, as they would demonstrate that Congress remains capable of producing reasonable compromises on contentious issues of real importance.
The Republican participants in the Gang of Ten represent the very small (and shrinking) wing of the party that has not succumbed to the Trumpian fever of recent years. They should consider making the country’s democratic institutions work as intended as an important goal.
At the same time, they should know that making a deal with the Democrats would also come with political costs. Working with Manchin and other Democrats on tax and spending issues would alienate them further from the rest of the party and thus expose them to major challenges.
So be it. As things stand, the GOP is primarily a destructive force in American politics. Elected Republican senators who understand this — and privately despair of it — could help steer their party in a healthy direction while addressing issues of critical national importance and staying true to their principles.
The Gang of Ten is aware of its unique position and power within a hyperpartisan Congress, but so far has avoided topics that carry substantial political risk (the infrastructure bill was a real expense with not-so-real compensations). Diving into big budget issues would represent another level of controversy. One could understand if there was reluctance. But that would still be disappointing.