Obama's former top economist raps him over lack of engagement on entitlement reform 

Here’s a story from Politico that’s not getting enough ink: ten former chairmen of the President’s Council of Economic Advisers have signed a letter urging the White House—urging Barack Obama, actually—to start negotiating actively with Republicans as well as Democrats on entitlement reforms. Key grafs:

As former chairmen and chairwomen of the Council of Economic Advisers, who have served in Republican and Democratic administrations, we urge that the Bowles-Simpson report, ‘The Moment of Truth,’ be the starting point of an active legislative process that involves intense negotiations between both parties.

There are many issues on which we don’t agree. Yet we find ourselves in remarkable unanimity about the long-run federal budget deficit: It is a severe threat that calls for serious and prompt attention.

The chairmen are diplomatic enough to phrase this as an appeal to both parties and both the executive and legislative branch. But don't let that mislead you. This is really a direct appeal to — and an implicit but sharp criticism of — President Obama. For there are already negotiations going on between six senators, three Democrats (Kent Conrad, Dick Durbin, Mark Warner) and three Republicans (Mike Crapo, Saxby Chambliss, Tom Coburn), on this subject. House Budget Committee Chairman Paul Ryan has promised to include entitlements changes in the budget he will present next month. House Democrats are missing from the action, as one might expect, but that’s not terribly important at this stage: bills can pass the House without them.

The elephant not in the room on this issue is Obama, who had time to burn for a White House event on schoolyard bullying, but couldn’t find time to consult members of Congress about military action in Libya.

All ten of the economists signing the letter are, to the best of my knowledge, well respected scholars. Six of them are Republicans, and their endorsement of the letter is not terribly surprising. But four are Democrats, Charles Schultze (CEA Chairman 1977-81), Laura Tyson (1993-95), Martin Bailly (1999-2001) and Christina Romer (2009-10).

It’s particularly interesting, and a withering comment on Obama, that Romer decided to sign the letter. I don’t know her, but I gather that her scholarly work is very good and from her television appearances I got the impression that she’s an extremely nice person. Her assurance that the February 2009 stimulus package would hold unemployment under 8 percent proved to be highly embarrassing, but I gather she’s right in saying that most economists didn’t expect unemployment to rise nearly as high as it did at the time she made that statement.

From time to time CEA chairmen are called on to defend the indefensible, and this was her time. Her resignation after two years was taken by some conservatives as a sign of anger at the president; I doubt this very much, since it’s standard practice for academic economists to return to their academic posts after two years in order to retain tenure. Anyway, it’s surprising to me that more ink is not being spilled on Romer’s endorsement of this letter. It really is newsworthy.

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Michael Barone

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