Wednesday the Obama administration’s deficit commission submitted its penultimate report. The deficit commission statement outlines across-the-board tax revisions and spending cuts designed to slash $4 trillion in deficit spending over ten years. Analysts have little confidence the statement, called “Moment of Truth,” could be dealt with seriously by Congress.
Deficit commission experiencing the ‘Moment of Truth’
The deficit commission is an 18-member panel co-chaired by Democrat Erskine Bowles, President Clinton’s previous chief of staff, and previous Republican senator from Wyoming Alan Simpson. The panel will election on the deficit reduction recommendations proposed by “Moment of Truth” on Friday, Dec. three. The proposal has to get 14 members from the panel to vote on it if it is to be implemented by Congress easily. In the deficit commission report, Bowles and Simpson said “The era of debt denial is over, and there could be no turning back. We sign our names to this plan because we love our children, our grandchildren and our country too much not to act while we still have the chance."
Deficit commission report details
To make it more acceptable politically, the deficit commission statement has been revised from a version submitted three weeks ago. There would be an end to income tax rates. It would also make it so tax credits and expenditures would end. There would be a decrease in the highest income tax rate. It would go down to 23-29 percent from 39.6 percent. In 2050 the Social Security retirement age would go to 68 while in 2075 it would be at 69. The income cap on payroll taxes would be elevated to $190,000. To mollify Republicans, a cap on tax revenue was added, plus $50 billion in immediate spending cuts and an eventual return to 2008 spending amounts. For Democrats, upper-income Social Security cuts and a Medicare voucher program for private insurance were scaled back.
Using politics when it comes to deficit reduction
Few believe the uncompromising deficit commission report is politically realistic. The wheeling and dealing that has resulted in the current $1.three trillion budget deficit and $13.8 trillion national debt will be a hard habit to break. Congress will decide on the debt commission. Inflating the bottom line is the goal of Congress though. The idea isn't accepted very well. The community especially feels this way. Reducing the deficit is one thing most have shown in polls to agree with. Taking away their entitlements isn't part of that deal though.
Citations
USA Today
usatoday.com/news/washington/2010-12-01-deficit-plan_N.htm
Business Week
businessweek.com/news/2010-12-01/social-security-income-tax-cuts-part-of-debt-plan.html
ABC News
abcnews.go.com/Politics/budget-deficit-commission-release-report-political-tackle/story?id=12279916
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