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Critics doubt bipartisan group 'No Labels' has all the answers

While the No Labels plan may look good on paper, budget experts on both left and right are skeptical that the group’s fiscal goals are the best policy.
A man jogs past the U.S. Capitol in Washington, D.C., on Sept. 30, 2013.
A man jogs past the U.S. Capitol in Washington, D.C., on Sept. 30, 2013.

There they are again, coming up over the horizon.

As predictable as congressional gridlock, they march forward arm in arm, bearing white papers, policy prescriptions, and panel discussions in well-appointed event spaces: the trans-partisan, solutions-oriented saviors who promise to rise above the fray of the squabbling children on Capitol Hill. 

This time, they’re part of a group called “No Labels,” which has convinced more than 80 congressional lawmakers and high-ranking former officials to rally around four national policy goals: Create 25 million jobs over the next decade; make American “energy secure” by 2024; secure Medicare and Social Security for 75 years; and balance the federal budget by 2030.

The group hasn’t filled in the details yet for its plan. That's coming soon — well, a year from now, after a series of discussions with ordinary Americans. But No Labels insists that its campaign is nothing short of a revolution in politics and policymaking. 

“Nothing like this has ever been tried before. Many of our leaders say they want to unite our country, but they never tell us how,” said No Labels founder Nancy Jacobson. Having come up with its policy recommendations through a nationwide survey, the group now wants its agenda to shape the 2016 presidential debate and the next presidency, Jacobson said.

“Nobody tells you how they’re going to do it. Nobody tells you,” added No Labels co-chair Jon Huntsman, the former Utah GOP governor and presidential candidate who unveiled the policy plan on Wednesday. “This is the how. What you’re all gathered here to do is the how.”

But while the No Labels plan may look good on paper — or sound good from the campaign stump—  budget experts on both left and right are skeptical that the group’s core fiscal goals are the best policy prescriptions, or are even smart politically when the details are finally worked out. 

Achieving a balanced budget by 2030 would be particularly tough, given the dramatic changes to both tax revenue and spending that such a plan would necessarily entail to receive bipartisan support from lawmakers. 

“Once you start laying out the realistic options for achieving those goals, they’re just going to have a coronary,” says Stuart Butler, the former Heritage Foundation analyst now at the Brookings Institution. “It does mean staggeringly difficult decisions, not just politically, but technically. You’d have to raise payroll taxes substantially, to raise income taxes. Once you told one town hall meeting how much their taxes would go up, that would be the end of it.”

A balanced budget in and of itself doesn’t mean long-term fiscal sanity and economic health, Butler added. 

“Most economists don’t think that a balanced budget per se is necessarily the best economic target,” he said. "You want to get debt to GDP to a reasonable ratio, and the deficit to 2 percent of GDP. But there’s nothing economically magical about a balanced budget.”

Marty Sullivan, a former Treasury official who spoke at the No Labels event, said the goal of a balanced budget is "emotionally appealing" but not realistic. 

“I would be ecstatic if we could get to a 3% [deficit to GDP ratio] in the long term, but to place the bar so high to say we need a balanced budget almost makes the whole exercise a fantasy," Sullivan said in an interview with msnbc. 

What’s more, the year 2030 might not be the right moment for a balanced budget anyway. 

“To set a specific deadline like that makes no sense economically, It’s entirely possible that 2030 is the wrong year. Perhaps the deficit should be eliminated sooner — it’s an arbitrary number that makes no economic sense whatsoever,” says Stan Collender, a former Democratic budget aide. 

By comparison, both Simpson-Bowles and Domenici-Rivlin — bipartisan deficit reduction plans that No Labels and like-minded groups have embraced — focus on reducing the debt-to-GDP ratio as the best way to rein in long-term deficits. A small but vocal minority of deficit owls don’t believe such targets are meaningful or useful at all. 

Some budget experts are also skeptical of No Labels’ goal to keep Medicare “strong and solvent” for the next 75 years. While they believe it’s important to rein in entitlement costs, they point out that achieving such a goal would entail dramatic changes to the program. 

By endorsing impressive-sounding end results and leaving the policy details for later, No Labels and its supporters may be in for some sticker shock.

“A lot of Americans that may think that means 'keep it the way it is, just make sure it’s paid for.' If you think about that way, it’s impossible,” says Butler, who pointed out that fundamental changes to the entire health-care system will be necessary to keep Medicare solvent for so long.

What's more, unlike Social Security, cost-saving reforms for Medicare are extremely difficult to predict. “It’s definitely desirable to make it solvent 75 years, but it’s a lot harder. We won’t really know if [reforms] will work, if they’ll be able to sustain themselves over 75 years,” says Marc Goldwein, senior policy director at the Committee for a Responsible Federal Budget. 

Just this summer, Medicare hospital spending slowed unexpectedly. The trend is expected to continue for the next two years, but it’s unclear what will happen after that, as analysts aren’t sure how much of the slowdown was due to the economic downturn or new reforms under Obamacare.

"With all the uncertainty projecting the costs of health care, to plan now for what Medicare’s going to look like 75 years from now is just foolish,” says Paul Van der Water, senior fellow at the Center on Budget and Policy Priorities.

No Labels co-founder Bill Galston, a former adviser to the Clinton White House, defended the group’s endorsement of a balanced budget by 2030, arguing that it coincided with the great economic gains of the 1990s. “Bill Clinton committed himself in 1995 to a goal of a balanced budget — it was a goal that Americans could understand and that Americans could aim at,” he says. Galston, a senior fellow at the Brookings Institution, added that the group isn’t interpreting the goal rigidly, with the expectation of a balanced budget every year.

But Galston said No Labels is willing to revisit and revise its policy goals after consulting with ordinary Americans. The group took its direction from a nationwide survey that allowed participants to chose from around 70 different policy goals, and it plans to fill in the agenda’s details by “gathering opinions from people across the political spectrum” in New Hampshire, Iowa, and other states, according to Johnson. 

Given the prominence of No Labels’ fiscal goals, the group’s year-long campaign will effectively try to restart the debate over deficit reduction after the ignominious death of the so-called "Grand Bargain" on Capitol Hill last year—the last time high-riding, bipartisan groups of fiscal hawks tried to save the day. 

“Goals are better than no goals,” says Goldwein, who’s advocated strongly for a major deficit reduction. Butler said No Labels has the opportunity to explain the costs of inaction to ordinary Americans—and wake them up to the politically tough changes that will be necessary to achieve reform.

It’s unclear what the final policy outcomes will be—and that’s the point, Galston says. “We’re open to the possibility that at the end of the day, people will look at the means needed to attain the goal and say we can’t quite get there that fast,” Galston says. “We’re not saying this exercise is necessarily going to have a successful conclusion.”

It’s all part of the No Labels’ bottom-up approach to policymaking, Galston continues. "We didn’t have our thumbs on the scales and we were prepared to take what we got,” he says. “Did all the people who endorsed those goals understand what it would take to reach them? The answer is obviously no.”