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MS. DYNAN: I’m Karen Dynan from the Economic Studies Program here at Brookings, and I’ve got with me up here my colleagues, Charlie Schultze and Alice Rivlin. We’re going to spend the next hour talking about the U.S. budget and economic outlook.
I can’t think of two better people to be talking with about these issues because they’re both experts on the economic and budget situation. They both have had illustrious careers as Brookings scholars, and they also have had incredibly relevant policy experience.
Charlie was Chair of the President’s Council of Economic Advisors under President Carter, and Alice is the founding Director of the Congressional Budget Office and served as the Director of the Office of Management and Budget, as well as Vice Chair of the Federal Reserve, among many other accomplishments for each of them.
I’m going to start things off and lay a little groundwork about the general economic situation before Charlie and Alice dig in on some important topics within that area. First, just a little bit of good news, and that has to do with the recent data over the last few months.
Six months ago, last summer, there were a lot of people who were very seriously concerned that the U.S. economy was slipping into a double dip. And since then we’ve gotten data that’s been better than people expected, and those concerns about a double dip recession have dissipated. So, we’re not hearing about that anymore, but even so — and here I get to the not so good news — the forecasts for what’s going to happen for the coming year just aren’t that impressive. Most people are looking for growth in the 2 percent range, maybe 2-1/2 percent. You’re going to hear from Mark Zandi later on; he’s a little bit more bullish than that. But, even his more optimistic perspective isn’t the kind of growth we need to get out of the current situation very quickly.
To truly appreciate how bad this situation is, let me offer a few numbers from the labor market:
We lost nine million jobs to the great recession. Since the recovery began, we’ve seen some job growth, but it’s been paltry, and hasn’t been enough to keep up with the growth rate of the population. Current estimates are that we need to create 12 million jobs to get back to full employment.
At the end of last year, in December, we saw payrolls expand by about 200,000 — a good month by the standards of 2011. But even if payrolls continue to grow at that better rate, if they don’t accelerate, it’s going to take us 10 to 12 years to get back to full employment and normal labor market conditions.
The unemployment rate is high; it’s about 8 percent, and it’s been about 8 percent for almost three years now. It’s incredibly striking if you look at a graph of the unemployment rate that goes back a number of decades, back to World War II, because what you see is other periods where the unemployment rate pops up in a recession, but then goes back down. It’s really striking this time because the unemployment rate has gone up and stayed up. It’s a very unusual situation for this country.
And that’s not even counting people who are not working as many hours as they’d like because they can’t find the work, or people who have dropped out of the labor force because they’re discouraged from looking for a job. If you take the underemployment rate – that includes those people I just described — along with the unemployed, that’s 15 percent of workers. That’s really high. It’s a bad situation.
Another disturbing feature of the current situation is the long-term unemployed. People who have been unemployed for six months or longer now account for 40 percent of the unemployed. Historically, that is a very high share; it’s about three times what’s normal and about twice what we’ve seen in past downturns.
The reason this is pernicious is because the longer you are unemployed, the more your skills erode, the more your attachment to the labor force erodes, and the harder it is to get back to work. The standard policies that we use to treat this sort of situation entail increasing demand under the assumption that if people are willing to buy a bit more, we’ll see another job created. But, if the unemployed have become so detached from the workforce that the firm that wants to create the job can’t find someone suitable to fill it, the problem can’t be treated by standard policies. Instead, we’ll need to devise more complicated treatments that involve rebuilding workers’ skills.
All these depressing facts add up to a lot of hard times for a lot of families for a lot of years to come.
Why are we in this situation? There are a lot of causes. Charlie is going to dig in on some of the data that show that we’re coming out of this financial crisis, and Alice is going to discuss important budget issues. I’m going to spend just a couple of minutes talking about a third key area — mortgage and housing.
Conditions in the housing market are bleak; I’m sure you know that. Housing starts — that’s new construction — have been running at about 30 percent of their peak level, and house prices are down by about a third from their peak. Both construction and house prices plunged when the bubble burst, and they’ve stayed at these low levels for several years now.
In terms of what’s behind that, one major factor is simply weak housing demand. That’s actually not surprising. We know that housing demand stems from income and wealth, and people’s ability to get loans. All those things don’t look good right now. It’s the macro economy: the high rates of job loss, soft wage growth, and the fact that it’s really hard to get a loan right now.
As a result, household formation has been quite soft. People just aren’t forming households at the rate they usually do. One statistic that you all might find interesting given what you do, is that one in seven adults between the ages of 25 and 35 is now living at home with his or her parents. That’s up from one in 10 about a decade ago.
So, households aren’t forming like they should be, and even those that are forming don’t have either the desire or, more importantly, the wherewithal to buy homes. They’re ending up in the rental market. Thus, weak demand is one factor affecting the housing market.
A second key factor is mortgage distress. The biggest issue within mortgage distress is the fact that so many people are underwater or upside down with their mortgages, meaning they owe more than their homes are worth. That accounts for about one in five mortgage holders in the United States now, and in some parts of the country, it’s even higher. For example, in Nevada, I think about 60 or 70 percent of homeowners are underwater with their mortgages.
People have been studying these underwater home mortgage holders, and being underwater alone is not what economists would call a “sufficient condition.” It’s a necessary condition, but people tend not to default unless they’re both underwater and they suffer some sort of shock that leaves them unable to pay their mortgages — for example, they lose a job or something like that. But there is a high rate of job loss right now, so the combination of those two things have led to high rates of people having payment problems or defaulting on their mortgages. And even those who are still sticking with it, those underwater homeowners who are still making their payments, they’re probably not out there spending, and so they’re not engaging in the sort of behavior that’s going to lead firms to create jobs.
The government has tried several programs to address this situation. Those programs haven’t been as effective as people hoped, partly because they were not targeted to the right problems, and partly because the people who designed those policies didn’t anticipate the kind of institutional and legal obstacles that it turns out the real world presents. The result is that people aren’t taking advantage of these programs in large numbers.
So, we’ve got weak demand and mortgage distress. The third key issue about housing markets is the high rate of foreclosures. It’s obviously all related. All that mortgage distress is producing a lot of defaults, and that’s producing a lot of foreclosures. We’ve already seen millions of foreclosures related to the financial crisis.
What people are so worried about is that there are still a lot of foreclosures to come. Conservative estimates of the size of the shadow inventory of foreclosures are between 1.5 and 2 million households. Those are foreclosures yet to come. I should say that the numbers just go up from there — there are estimates that the actual shadow inventory is maybe two or three times that size.
All these foreclosures are causing pain for the people who are foreclosed upon, and causing pain for their communities. They are also leading to a lot of houses being dumped onto the property market. Weak demand and extra supply are holding house prices down. In fact, people are worried that prices could decline further as this shadow inventory comes to market.
That’s probably the biggest risk at this point for the housing situation. It’s not that construction is going to fall further; it’s already at rock-bottom levels. Rather, it’s that house prices are going to fall further, and that’s going to cause people to take a hit to their wealth and cause them to spend less. That’s a big problem. And it all feeds on itself because if you’re expecting house prices to decline further, then, of course, your demand for housing is going to be lower, which just makes the excess supply situation even worse.
The final problem in housing and mortgage markets is an inability of many households to refinance. The Fed is doing what it should be doing, which is that they’ve lowered interest rates considerably. The main mortgage rate that’s cited, the Freddie Mac rate, is at 4 percent, which is extremely low. It’s the lowest level in the history of that series, which goes back many decades.
You would think that would be terrific because normally when mortgage rates are so low, people refinance their homes, which means that they save on their mortgage payments. Then they have more cash to spend, and that leads to more job creation and whatnot.
But that pipeline of transmission of monetary policy has been largely clogged over the last few years. The reason is that most people actually can’t get that 4 percent rate. Between weak incomes, people being underwater, and people with more dings on their credit history than they used to have thanks to the events of the last few years, on top of the fact that banks are being super cautious, it is very hard for many households to refinance their loans.
All of these problems in the housing and mortgage markets are holding back the economy right now.
I think I’ll end with a little piece of good news, and that is on this last problem, on the refinancing issue, the Administration has announced steps it is taking to mitigate these problems in refinancing. They’re changing the rules for Fannie and Freddie mortgages — the mortgages they can affect — such that it will be easier to refinance. None of that has gone into effect yet; it should go into effect in March. Hopefully that will lend a little support to our economy.
With that I’m going to turn things over to Charlie to talk about the fallout from the financial crisis.
MR. SCHULTZE: I’m going to focus on the sluggishness of the current economic recovery, and why that’s likely to continue for a while.
What’s behind the sluggishness? Figure 1, which was put together by the International Monetary Fund several years ago, is based on data from 200 different financial crises from 20 different advanced economies. It shows how recessions associated with financial crises are a lot deeper and then recover much more slowly than other kinds of recessions. That’s number one. And the current U.S. recession and recovery is a striking example of this problem.
Figure 2 shows fluctuations of GDP around the potential output of the U.S. economy. The potential output of the economy is essentially what it could produce when operating with sales of goods and services that are high enough to result in full employment of the labor force, and a high use of the capital stock — but not so high and not so large as to generate inflation; it’s a level of output that’s neither recessionary nor inflationary.
You can see the variations of actual GDP around potential output, and you can see the recessions and the recoveries. Generally, recoveries are fairly sharp, except this one. This is not only the deepest recession — although it’s not much different than in 1982 — but it’s also lasting longer because the recovery has been so slow. Historically, recovery takes off about seven quarters after the bottom of the recession. The current recovery is way outside the norm.
Employment is even worse. Figure 3 shows what’s happened to employment relative to what it was at its peak for all of the recessions, going back to the 1960s. As you can see, the current recession is out of the ballpark both in terms of how far down unemployment went and how slowly it’s going up compared to other recessions.
The yellow line, showing job losses after the 2000 recession, is the nearest to the current episode in terms of slowness of recovery in part because it also came after a large boom and then a bust in stock prices that cut into household net worth. But it was still far better than the recent experience.
Other aspects of the U.S. labor force performance are also much worse during this recovery. The average duration of unemployment has skyrocketed. In the boom between 2004 and 2007, when a typical person lost a job, he or she could expect to be unemployed for two months. In mid-1983, that expectation was about 12 weeks. But in the last two years of this recovery, the average unemployed American has been out of work for 22 weeks. That’s the average, which means there are a lot of people much, much worse off than that.
Typically, in an innovating and otherwise dynamic economy like the United States’, there are a number of forces usually working to turn recession into relatively strong recovery:
Business firms draw down their inventories, and at some stage have to begin replacing them in order to operate efficiently. After a longer lag, a subpar volume of housing starts, combined with the rise in the number of households as the population increases, induces new housing construction for sale or for rent. And, most importantly, in a dynamic economy like the United States’, the continuing pace of innovation can be counted on, with the help of an easy money policy, to stimulate a speed up in investment among individual firms, whose future depends on keeping up with their competitors in terms of modernization of their production facilities and the sales of new and improved products.
The economic literature has recently been full of analyses of why financial crises produce larger than normal downturns and overcome those natural growth forces — or, if not quite overcome, at least suppress the rate of recovery. Why has that happened?
First, it’s because of the financial crisis that most of the downturn is happening in the first place. Financial crises are usually associated with a bubble in some kind of asset prices, and the subsequent steep fall in those prices can take a large bite out of households’ net worth (the value of their assets minus their liabilities).
Principally because of the boom in housing prices during the years immediately preceding the recent Great Recession, the net worth of the average American household by the end of 2006 had soared to an unprecedented 6.5 times that year’s average household income. But mainly due to the subsequent collapse in housing prices which followed, by the end of 2008 net worth plummeted to less than 5 times income. The ratio has since recovered only a modest fraction of that loss.
I’ll tick off a few of the most obvious consequences of this decline in household net worth:
Households in various circumstances reacted to the sharp drop in the price of their houses and the heavy mortgage and other debt incurred during the prior boom by cutting back on their spending and trying to rebuild their net wealth. (The recession in 2000-2001 was associated with a collapse of the “dot.com” stock price bubble, but unlike the recent steep fall in housing prices, that did not leave millions of homeowners and some of the nation’s major financial institutions saddled with unpaid mortgage and other debts.)
Financial institutions suffered large losses and reduced their lending. Their distress was substantially magnified in the recent U.S. financial crisis by the fact that in recent years, financial institutions had sharply increased the extent to which they were financing long-term debt with very short-term borrowing which they found difficult to roll over in an atmosphere of uncertainty about their financial status. The widespread losses and damages along these lines also increased the risk aversion of lenders generally, who tightened up their credit standards and shrank the flow of credit. As Karen was saying, low interest rates are good, but only if you can get them.
Simultaneously, the size of the accompanying recession created growing uncertainties about the economic future, which only increased given the sluggishness of the recovery. And so both the supply and the demand for credit contracted, with dampening effects on the pace of recovery in output and employment growth.
Eventually the growth factors inherent in our dynamic economy will begin to outweigh the residue of the financial collapse. But the history illustrated in Figure 1 by the IMF suggests that the pace at which growth factors overcome the aftermath of the financial recession is not a rapid one.
Let’s look at some of the major sectors of the economy in terms of their prospects for helping to overcome the drag on recovery. Before I do that, though, it’s only fair to remind you of something Churchill once said. When he was asked about his view of the merits of economic policy tools and forecasts, he replied, “My favorite economic policy is prayer. It’s not demonstrably less effective and carries none of the bad side effects.” So, keep that in the back of your minds while I’m going through this.
Let’s start with consumer spending, and look ahead a little. Consumption accounts for 70 percent of GDP. To the extent that it rises about as fast as consumer income, it’s following the parade, but it doesn’t add anything extra to give us a boost out of a slow recovery. It’s not an independent force at either generating or retarding that. But if on the other hand, consumers raise their saving rate, that tends to slow the growth of demand and GDP and vice-versa.
I think it’s too early to assume that the drag on spending from the loss of consumer net worth has run its course. Consumption did grow faster near the end of the year, and that’s one of the reasons that growth looked better. But I don’t believe we can expect that this rise of spending faster than household income can continue. So, consumption is unlikely to play an independent role stimulating faster growth in the coming months and year or two.
Figure 4 shows housing construction as a share of GDP. It’s true that slow, steady growth in the number of households, the cleaning up of the mess of recordkeeping by mortgage owners, and the removal of the overhang of foreclosed homes will raise the growth of demand for new homes. But that’s a slow process, and while I don’t have any models to track it, it’s not likely to have a substantial impact for a while yet.
What about government spending and taxes? Well, the future is very murky here. It’s highly likely the federal government’s fiscal stance, however bitterly fought over, is going to feature a number of years of spending cuts and some tax increases. And for a while at least, many state and local governments will be moving in the same direction.
What about business investment in plant and equipment? It’s actually been an exception to the very slow recovery in the rest of the economy, which surprised me when I racked the numbers up. In the seven quarters since the trough of the recession, business investment has risen at an annual rate of 10 percent, despite slow growth in commercial construction as part of it. After only one of the recessions in the past 50 years has the recovery of investment been significantly larger than this, so it’s done pretty well. But there’s nothing to suggest that investment growth is likely to speed up beyond this pace unless other factors begin generating a more vigorous overall economic recovery.
And what about exports? Exports as a share of GDP have inched upward slightly over the last few years. But the continuing financial problems in Europe, and the associated rise in the value of the dollar together with the probable moderate easing of growth in Asia, don’t suggest that we can look to exports in the nearby foreseeable future, to fuel a significant increase in the pace of recovery.
Finally, and I may be infringing on Alice here, but I’ll give you just a paragraph. What can be done to fill in and give a boost to recovery until the normal growth factors take over, and the effect of the decline in net worth gradually disappears? In theory, we know what needs to be done; namely, legislation that provides some meaningful fiscal stimulus now, and simultaneously enacts into law an increasingly rigorous deficit reduction program that begins several years from now or, alternatively, takes effect when the unemployment rate drops below, say, seven percent.
It’s a great idea. There are only two problems with it. At least at the present time, I see no probability of the Congress enacting such a package. And even if they did, I think it would take more bipartisan effort than now exists to put together and enact legislation that would raise and sustain high barriers against the Congress changing its mind in the future.
And on this happy note, I’ll stop.
MS. RIVLIN: My job is to cheer this group up after that, after both of you actually.
I think the most serious problems facing us are political, not economic, and that’s why I am discouraged at the moment. The economic situation of this deep recession and slow recovery is not mysterious. We did some very stupid things leading up to the crash of 2008, and we’re paying the price. But for all the reasons that Charlie and Karen have elucidated, we can get out of this if we hang in there. It’ll be slow, but we can get there, and the government can help.
I totally endorse Charlie’s two-part economic prescription. We do need to stimulate the economy more now to get out of the recession and, simultaneously, I believe, enact long-run deficit reduction now that goes into effect gradually in the future. There isn’t a lot of real disagreement about that sort of approach among economists who aren’t so blinded by ideology that they can’t say what they actually think.
A year ago when I spoke to this group, I was more optimistic that we could solve the political problem. I thought what we needed to do was exactly those two things, to fold into a long-run deficit reduction plan some additional stimulus for the economy. And at that point, I was hopeful that we might do it.
I think the President missed a big opportunity in his State of the Union address a year ago to make those points, to say to the American public, we’ve got to get out of this recession, it’s going to be slow and painful, we’ve got to do everything we can, but we also have to recognize the long-run deficit problem. He didn’t really do that. I think he should have. In fact, I think he should’ve done that in 2009 when he first took office. He might’ve gotten a bigger stimulus if he had said, this is the first step, and we do have to recognize that we have to make the debt increase more sustainable, and we’ve got to do both at once. But Obama didn’t do that, and he had a couple of other chances, and the Congress had other chances.
The reason I was optimistic about the situation last year was that I was working actively at the time with two commissions that had reported in the previous year, and had proposed some solutions to these problems. Those were the Simpson-Bowles Commission, appointed in early 2010, with the charge of getting our debt problem under control, and another commission headed by myself and my good friend Pete Domenici from New Mexico, with essentially the same charge.
Having lived through a year of working in two bipartisan groups on the problem of the long-run deficit, I was heartened that when we sat down with people from very different views— and many of them sitting members of Congress — that we could work through this problem and come to a compromise.
The Simpson-Bowles Commission recognized that the big drivers of the deficit going forward were not the recession, which will come to an end, or the two wars, which are winding down, or even the tax cuts of the Bush Administration. They were primarily the demographics of the baby boom generation retiring right now even as we speak, and the inexorable increases in the cost of health care, so that the three programs in the federal budget that drive spending upward faster than the economy can grow are Medicare, Medicaid, and, to a lesser extent, Social Security.
If we don’t do something, spending on those programs will grow faster than the economy, and revenues won’t. At any reasonable set of tax rates, revenues will grow about as fast as the economy grows. The result is a widening wedge, and we’ve known that widening wedge was there for a very long time. We’ve talked about it, but we haven’t done anything about it. And now we face a higher level of debt since we have been through this severe recession, and the two wars, on top of all the other things that have increased our debt.
The basic problem, though, is the problem of the demographics in health care versus the prospect of revenue. The two commissions worked through this, and lots of other people have worked through this, and come to the precisely the same conclusions. What we have to do is find some way to slow the growth of the entitlement programs, especially the health care entitlement programs, over time. So, we sat with a group of Republicans and Democrats and figured out how to do that. Nothing was easy, but we came up with some proposals for doing both.
But then we looked at what we’d done and realized it doesn’t help very much for a long time because these are retirement programs. We can’t change them quickly. You can’t even do that in a university, let alone a country. And so, the effects of slowing the growth of entitlements are slow and far in the future, but necessary.
So then we looked at the other things the government spends for, the annual appropriations, discretionary spending, including education, and said, well, we could do some of these things in the domestic sector or the defense sector more efficiently, or cut out some lower priorities and put in some higher ones. And the best way to do that is to cap discretionary spending for both domestic and defense, and then figure out what to do within those totals.
If we hold the spending constant, we save quite a lot from what the debt is projected to be, along the lines of a trillion dollars over 10 years, and more in the future. But then we realized that we hadn’t solved the problem because even with quite drastic proposals at the edge of what’s probably politically possible, there’s still a gap, and we realized we’ve got to raise more revenue. The nice thing about that is that we can reform the tax system and raise more revenue in a more efficient way, and conceivably with lower rates.
So, anybody really who’s looked at this in a bipartisan way comes up with a set of proposals that look roughly like that — the gang of six, the gang of eight, the commissions, whomever.
So that’s where we were a year ago. And then what happened? Absolutely nothing, nothing positive. We spent the summer and part of the fall in this absurd, irresponsible — I can’t think of strong enough words for this one — wrangle over the debt ceiling, where people were going to the brink of threatening that the U.S. government would default on its debt. Most of us considered it unthinkable that the Congress could do that.
But out of that came the Budget Control Act, which actually, again, gave some hope that we might solve the problem. It froze domestic and defense spending for 10 years, which was what both commissions had come up with as well. And it created yet another committee, the Joint Select Committee, the Super Committee.
I think much of the public didn’t pay much attention to that. It seemed like, oh, no, not again. But here in Washington, a lot of us thought the committee had a real chance to get something done. The committee had extraordinary powers. They could have taken a bill to the floor by majority vote — they only needed seven out of the 12 members — that would have put the long-run problem on a sustainable track. But that would’ve taken the combination approach that the Commission had come up with, namely to do something about both the entitlement programs and about revenues.
Simpson, Bowles, Domenici, and I all testified before the Super Committee and then spent endless hours talking to members and staff, and Pete and I, at least, were moderately optimistic that they might do it. They didn’t. They failed, and the failure of leadership and eagerness to get into the campaign was something to blame the other side for. But it was very irresponsible behavior.
What happens now? It’s very hard for me to think that this year we’ll see anything much more bipartisan than we’ve already seen. It doesn’t sound like that, if you listen to the campaign. I don’t know what we’ll hear from the President in the State of the Union tonight; I think he does have a chance to lay out the double problem and to make very clear that we have to solve both the long-run and the short-run problems, and here’s how to do it. But I don’t know whether he will do that.
At the end of this year, there is another chance that they may come together, a forcing event. One forcing event is that if the Congress doesn’t do something, the Bush tax cuts all expire, and that raises a lot of money, although not in a very good way. The other thing that happens is that having failed, the Joint Select Committee left in its wake sequestration mandating automatic further cuts in discretionary spending.
Nobody wants either of those things to happen, and it could be that cooler heads prevail and there’s enough leadership in the Congress and in the White House to avoid the Bush tax cuts all expiring at once, and the automatic cuts in spending.
But I’m not optimistic. The record has been to kick the problem down the road. Lots of people say that’s all right; we knew nothing would happen until after the election. Well, it’s not all right. We don’t know what will happen in the markets. We don’t know what will happen in Europe. We don’t know how long we can enjoy these very low borrowing rates that the United States gets from markets abroad and here.
But even supposing that we get to 2013 and nothing terrible has happened, how is it going to get better? No matter who wins and what they win, we have to have a bipartisan compromise to solve this problem. And until the two parties wake up to that and start working together instead of blaming each other, I don’t see how we get out of this. And it’s totally unnecessary because everybody knows what the solution is, and we just aren’t doing it.
MS. DYNAN: Thank you, Alice. I have to say I’m a little disturbed because since I arrived at Brookings two and a half years ago, I discovered that Alice is the person amongst us in the dismal sciences that you turn to when you’re feeling particularly grim and bleak because she almost always cheers you up.
We have just a few minutes left for some questions, so please ask. Yes.
SPEAKER: I have a question for Dr. Rivlin. At least from everything I’ve read, I’ve never seen the President embrace Simpson-Bowles or your work with Domenici at all. It’s as if these never happened from a public perspective, from what I’ve seen. Does it look like that from Washington?
MS. RIVLIN: It does to me, and I don’t understand it. I thought the President had a chance to pick up Simpson-Bowles and say, I appointed these folks; they worked hard. I don’t agree with everything they said, but I’m going to work with the Congress to get it done. And he didn’t do that.
Now, in defense of the President, he has slowly and gradually and a little behind the scenes, in my opinion, come forward with some reasonable budget plans of his own. He made a very good speech at Georgetown in October, I think it was, in which he laid out a major budget plan. But not everybody reads Georgetown speeches, believe it or not, and he didn’t follow it up or go around the country saying we have to do this.
Instead what he did was emphasize the short-run problem, which I thought was a tactical mistake because that made it a Democratic crusade, rather than emphasize that we’ve got to do these two things together.
SPEAKER: Do you think one of the problems is that somehow in the back room, bipartisanship — one might even call it rationality — prevails, and that the real problem is that in the public sphere, that is, in front of the cameras, everybody backs off from what they said five minutes before in the back room? One can imagine a mechanism of anonymous votes or something like that where we could move the discussion further before people start gaming it and spinning it in front of the cameras. That’s what Simpson-Bowles asked people to do, but then they all ran out and said, oh, no, he said/she said.
MS. RIVLIN: Actually Simpson-Bowles did do that, and the members of the Commission didn’t go out and say he said/she said. They were quite cohesive, and some real bipartisan courage was displayed by Republicans like Coburn and Crapo and by Democrats like Durbin. And the Joint Select Committee had exactly that chance too. That’s why I was optimistic. And they didn’t leak either. They didn’t go out blaming each other. In the end when it failed, the leadership blamed each other.
But it’s hard to think of a mechanism other than that kind of approach that will get us there.