Early yesterday, I attended a Third Way panel discussion on the budget and deficit that featured Rep. Jim Cooper, Sen. George Voinivich and Sen. Kent Conrad.

I arrived late, so I probably missed some important bits, but here’s my takeaway:

Conrad: can’t do austerity in middle of worst recession since great depression, but austerity measures will have to be implemented. His best guess is in 2 or 3 years, after the economy has turned. Entitlements, including social security, will have to be reined in. Go after overseas tax dodges/abusive tax shelters. Cites wealthy Americans purchasing European infrastructue (sewer systems), depreciating them for purposes of American taxes, and leasing the sewers back to the countries. Not just sewers, either. Other infrastructure deals too.

Voinivich: ALL Americans will have to accept tax increases. Norquists’ “no new tax” pledge inconsistent with his colleague’s oath of office. Mortgage tax deduction must be eliminated.

Question time:

I ask something akin to, “The commission is composed of creatures of the status quo. The status quo has worked out quite well for them so far; that’s how they got on the commission. How can we have faith that they will break from the status quo to consider the full panoply of solutions? For instance, generating growth by investing in a new energy economy, or reducing our role as the world’s policeman, or if we are going to be the world’s policeman, asking others to pay the cost of the security we provide? And a specific question about social security: the refrain last decade was “it’s the people’s money, they should get it back”. But of course, we all know that the tax cuts went, largely, to the ultra-wealthy and the dollars they got came from the paychecks of working Americans payroll tax contributions. Is there any way to claw back those tax cuts so that we might leave social security alone?”

Conrad answered that he agreed the Bush tax cuts were a transfer to the wealthy from the middle class, but it is too late to do anything about it. There’s simply no way to leave Social Security and Medicare alone. (It was difficult isolating Social Security – they always want to throw in Medicare. ed.). Starts in again on abusive tax shelters/offshore tax havens.

Moderator follows up on my question and asks if Bush tax cuts will expire. Voinivich says that’s a foregone conclusion, although we may be able to make sure the marriage penalty is permanently eliminated.

Cooper sat there the whole time looking down his nose at the great unwashed, despairing about our lack of economic literacy.

After the event, I tracked Conrad down because he didn’t answer the first half of my question about the Deficit Commission being composed of the same old creatures that got us into this mess and personally benefited from the status quo. Talked about how in America’s “Glory Days” – when we were gaining in stature under Eisenhower/Kennedy – top marginal tax rates were at 70-90%. That you didn’t see CEO pay at $200 million/year because $140-$180 million of it wound up in gov’ts purse. Instead, companies invested in R&D and new plants, putting more people to work. Conrad agreed! I said, “Great, but how can progressives be sure their voices will be heard and considered by the Commission?” Conrad replies, “Your talking to me right now.” Somehow, I’m not overwhelmingly reassured.

Finally, I didn’t think of asking Conrad at the time, but if he is concerned about abusive tax avoidance, perhaps it’s time to poll the Deficit Commission members to see how many of them have availed themselves of such instruments. A birdy whispered in this reporter’s ear that Erskine Bowles – Co-Chair with Alan Simpson – has dirty hands.