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Monday, June 06, 2005

Is Rep. Bill Thomas the Rube Goldberg of Legislative Reform?

This does not fill me with confidence about Social Security reform.  Not at all:

Let's Make a Deal, Washington-Style, Howard Gleckman, BusinessWeek Online: …Representative Bill Thomas (R-Calif.) has built a reputation as the go-to guy on some of Washington's biggest -- and most complex -- policy issues. The massive tax cuts of George W. Bush's first term, the 2003 Medicare drug law, and landmark trade legislation all have the Thomas' stamp on them. Now, the Californian is the man to see in the House on Social Security. He vows his committee will draft a bill by the end of June. … Famously prickly and short-tempered, Thomas is smart and a hard worker. He's steeped in his committee's long tradition of deal making. ... But critics say the legislation he produces often falls short of his lofty goals and is loaded with costly special-interest giveaways. The Thomas method is built on a two-step process. … Step One … is to broaden a narrow issue into a grand concept. Time and again, he has turned a relatively limited problem into a vehicle for more comprehensive legislation. In 2003, for example, he was asked to help create a new drug benefit for Medicare. Instead, he aimed to replace government-provided Medicare with a system of market-based insurance. Similarly, when Congress needed to fix a problem with the way some U.S.-based exporters were taxed, Thomas tried to turn the repair into a complete redesign of the international tax system. He's already using the same recipe with Social Security. To Thomas, Social Security is just a slice of the much bigger problem of retirement security. He has made it clear that Bush's plan to create personal accounts may be just one small piece of a much larger package of savings, pension, and long-term-care measures. …

Step Two for Thomas is to deal. One by one, he'll identify potential supporters of a bill, find out what it takes to win their backing, and add whatever sweetener he needs to lock them in. … If the standard is getting bills passed, Thomas has been a huge success. But there's a downside: … what starts out as a creative reform sometimes ends up as a costly jumble of special-interest giveaways. That's what happened with the Medicare drug law in 2003. ... The 2003 Medicare law became a fabulously expensive jumble. Big Pharma will get big money to sell drugs to seniors. The elderly will get federal subsidies to buy the drugs, and insurance companies will get huge subsidies to offer managed care to wary retirees. But the real private market won't even begin for a decade, if at all. And the price tag for it all will approach $1 trillion over 10 years.

In 2004, after years of effort, Thomas muscled a major foreign tax measure through the House and, eventually, worked with Senate Finance Committee Chairman Chuck Grassley (R-Iowa) to get a bill through Congress. At the start, Thomas laid out an extraordinarily ambitious idea -- nothing short of completely remaking the way the U.S. taxed multinational corporations. … But business lobbyists balked, afraid their clients might lose out. And to win the support of lawmakers worried about those interests, Thomas started making deals. In the end, he got a bill passed. But he had to abandon nearly all of his original idea. As a result, the measure turned into an orgy of corporate giveaways. ... The law's true cost could be hundreds of billions of dollars over the next decade, although much of the price tag was hidden behind phase-outs and phase-ins. It was, say many critics, the most grotesque tax bill in memory. Of course, this isn't all Thomas' fault. The legislative process is always messy. And no one legislator deserves credit -- or blame -- for the outcome. But if Thomas' buy-me-love history holds, Bush may well get a Social Security bill this year or next. Just don't be shocked when you see the bill.

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    Posted by on Monday, June 6, 2005 at 03:34 PM in Economics, Social Security, Taxes | Permalink  TrackBack (0)  Comments (0)


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