By Howard Schneider

Agreement Among Analysts

In another era, agreement among analysts from leading left, center, and right-leaning think tanks over a sweeping plan to address major fiscal and social issues might carry some heft in Washington policymaking.

In today's culturally infused, party-line politics, when establishment voices particularly among the U.S. Republican party have been sidelined, this might not be the case.

But after a yearlong debate and analysis, economists and analysts from the Brookings Institution, Bipartisan Policy Center, and American Enterprise Institute have outlined a national "grand bargain" addressing everything from immigration and decarbonization to tax and entitlement reform.

Launched on Tuesday with a forum at Brookings, the authors have no illusions about how their plan will be received by the incoming Trump administration. While some of the ideas may align with the president-elect and his circle, such as expanded school choice and stricter teacher accountability, they also include recommendations that oppose current Republican views, including adopting a carbon tax, creating a larger safety net for the poor, and increasing federal taxes as a share of gross domestic product.

Compromise Across Principles

The goal, according to American Enterprise Institute economist Michael Strain, who co-chaired the group with Brookings senior fellow Isabel Sawhill, was to demonstrate the possibility of compromise across broad principles. Strain suggests that valuing school choice could offset views on a carbon tax or a more generous Social Security system for impoverished elderly Americans.

Ben Harris, vice president at Brookings and a former adviser to President Biden, noted the lack of incentives for cooperation in a Republican-controlled Congress. He emphasized the need for bipartisan compromise to address major challenges.

Tradeoffs and Proposals

The document indicates some compromises, like reduced spending for affluent seniors to enhance aid for vulnerable seniors and education. Proposed tradeoffs also aim for financial sustainability in entitlement programs by gradually capping Medicare spending while making Social Security more progressive.

The plan suggests preemptive tax increases, transitioning to more substantial spending cuts over time. This would include reforming the income tax system and allowing businesses to fully deduct investment costs while changing the structure through value-added taxes.

Moreover, the document recommends increasing federal funding for basic research and doubling employment-based green cards to bolster the economy and workforce growth.

Conclusion: Hope for Bipartisanship

The chances of these proposals gaining traction seem slim without a significant event, such as rising government borrowing costs. Jared Bernstein, current White House Council of Economic Advisers Chair, labeled it as a rational report amid less rational circumstances.

Yet, G. William Hoagland from the Bipartisan Policy Center believes that although the ideas are aspirational, some policymakers may find long-term value in the recommendations, even if they do not fully agree.