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Brian Gable/The Globe and Mail

The executive and legislative branches of the government of the United States should cease lurching from one fiscal emergency to another, nearly falling off so-called cliffs and bumping into so-called ceilings. They should compromise on an approach that restrains both social and military spending.

Canadians should not feel superior about these troubles; the public finances of this country were comparably hapless in the early 1990s and were repaired. Canada was fortunate in having a form of government in which the executive and legislative branches are not separate but rather intersect. Even so, American politicians in some periods have shown themselves capable of bipartisanism, though more often in foreign than in domestic policy.

The Canadian precedent of putting the Canada Pension Plan on a sound and sustainable footing is particularly promising. Unlike Social Security in the U.S., CPP at least had a fund of its own, but it was on the way to becoming insolvent; the federal and provincial governments undertook a review and agreed to a reform in 1996-1997. Social Security, which in the U.S. provides both the equivalents of CPP and of Employment Insurance, is based on an imaginary trust fund, and relies on general federal government revenues. Canadian EI is similarly lacking in specific funding, but that has so far proved manageable.

The U.S. should move Social Security to a genuine, separate trust fund. They already pay a specific payroll tax for it, but the citizens should be in a position to believe and to know that there is a very real and practical link between their own contributions and the money they eventually receive.

Such proposals as this are to be found in the December, 2010, report of the National Commission on Fiscal Responsibility and Reform, popularly known as Simpson-Bowles. It is not much of an exaggeration to say that most public figures in the United States, on all sides of the debate, praise the report but that hardly any of them actually agree with it. This equal balance of disagreement is, in a way, hopeful. A grand bargain between Democrats and Republicans would have to look very like Simpson-Bowles.