The leaders of President Obama’s bipartisan deficit commission floated a trial balloon this week, and responses were swift — and predictable. Erskine Bowles, a former chief of staff for President Clinton, and Alan Simpson, a former Republican senator, head an 18-member task force composed of 10 Democrats and eight Republicans asked by Obama to take a dispassionate look at federal spending and report back by Dec. 1.
Final recommendations have to get 14 votes before they can be included in the official report, and it’s not clear how the panel as a whole stands on this set of preliminary proposals.
Yet, as the saying goes, the chairmen’s initial list of ideas contains something to offend everybody.
Of course, that’s what any plan for real fiscal reform would do, because we have gotten in the sea of red ink we occupy today because our leaders have tried to please everybody.
Bowles and Simpson deserve credit for understanding that the revenue equation has two sides, outgo and income, and their proposals affect both taxes and spending. Briefly, they want to cut both domestic and military spending enough to reduce the deficit by $4 trillion by 2020.
They call for reducing and simplifying the income tax rate structure, while balancing that with “revenue enhancements” that include doing away with deductions for mortgage interest, dependent children and state and local taxes, along with a 15-cent hike in federal gasoline taxes by 2015.
They also supported entitlement reforms that include hiking the Social Security retirement age, currently 67 for younger workers, to 68 by 2050 and 69 by 2075, and asking Medicare to pay less for seniors’ care while recipients would pay more for coverage.
Critics said that the value of houses, now in a general decline, would go into freefall if homes lost that subsidy, while others noted that every product would rise in price if the gas tax rose.
Another analyst claimed that if Washington could just keep spending to a 2 percent rise per year, the budget would balance itself by 2020.
But the proposals may have achieved their initial aim just by jump-starting a vital conversation that this country has put off for far too long. Whatever we do, we need to do it now.
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