The Democratic Policy Committee (DPC) hosted an economic forum on October 11. Subtitled “Securing Our Economic Future,” it was billed as an attempt to offer a bi-partisan discussion of and debate about the issues underlying the nation’s economic woes. Though the point was clearly made that no Republican Members of Congress accepted the DPC’s invitation, the forum’s first panel was comprised not only of former members of Clinton’s Council of Economic Advisors, but also a former Associate Director for economics in President Reagan’s Office of Management and Budget and a former economic advisor to House Majority Leader Dick Armey (R-TX).

Members of the panel (Larry Kudlow, CNBC anchor and member of the Bush-Cheney Transition team; Stephen Moore, President of the Club for Growth; Gene Sperling, former Clinton Economic Advisor and current member of the Council on Foreign Relations; Janet Yellen, former Clinton Economic Advisor and professor at the University of California’s Haas School of Business) seemed to heed the caveat offered by one of the two moderators, Sen. Jon Corzine (D-NJ), that we have to admit we have a problem before we can address it – all four stated that the U.S. is still suffering from slowed economic growth and that earlier optimism that this condition would be short-lived is proving wrong. They agreed that only sustained consumer spending has helped mitigate the effects of the slow-down, and given current indications, consumer spending may also slow. Some kind of economic stimulus is now vital to jump-start the economy.

Moving from a unanimous recognition of the country’s economic problem to the next step of agreeing on a solution proved more difficult. The two more conservative members of the panel recommended, among other proposals, accelerating the tax cuts enacted last year and creating additional business tax cuts to increase companies’ willingness to invest in production now (an investor tax credit) and a reduction in the capital gains tax rate on new investments. Democratic panelists strongly advised against making the tax cuts permanent or accelerating them, arguing that they ought, instead, to be frozen, since future tax cuts will primarily go to wealthier Americans, who are less likely to put the money to use.

Democrats recommended an immediate infusion of federal aid to the states to mitigate state cuts to Medicaid, education, capital improvements, and social services. Both sides agreed that extending unemployment benefits was a good thing to do, while the conservative side didn’t expect doing so would do anything for the economy and Democrats argued that extension of benefits would be beneficial, since the benefits would be spent immediately. Along the same lines, Gene Sperling suggested a tax rebate to those taxpayers, mostly low-income, who did not qualify for the rebate last year – again because it would infuse more consumer spending into the economy.

There was some effort at suggesting possible compromises. Sperling suggested that an agreement might be reached around some form of business tax credit, if it were carefully crafted to provide for the most immediate and directed influx of spending on new equipment and new hires. He recommended such a tax incentive be limited to a 6-9 month duration – not the 3 years of the version contained in last March’s economic stimulus legislation – to ensure a stimulative impact. In exchange, Republicans might compromise by freezing last year’s tax cuts for the higher marginal rate taxpayers or make another concession.

In his closing remarks, Corzine’s fellow moderator, Rep. Charles Rangell (D-NY) asked, "How do we make this conversation happen?" This is the real crux of the issue, because the Administration has given no sustained attention to an economic stimulus plan, and, until today, no Democrats had put forth an economic stimulus package. One proposal that could provide an immediate effect is extending unemployment benefits to those who will otherwise lose them on December 28. Another proposal, offered by Robert Reich in today’s New York Times, is a temporary elimination of payroll taxes on the first $15,000 a worker earns. As Reich points out, this should provide added resources both for workers and for their employers – which should please both sides of Friday’s panel. Just this afternoon, House Minority Leader Dick Gephardt unveiled his proposal for a $200 billion economic stimulus composed of tax cuts and federal spending on school construction, health care, and to help state and local governments protect against terrorism, although he specifically did not call for postponing or freezing last year’s tax cuts.

This panel was followed by two other ones covering corporate responsibility and retirement and Social Security. Each of these panels provided a healthy debate on the issues. The link above provides information about the panelists.