A new proposal to cut the federal deficit
The co-chairmen of a bipartisan presidential commission outlined a plan to lop nearly $4 trillion from the projected federal deficit by 2020.
What happenedDeclaring that “America can’t be great if we go broke,” the co-chairmen of a bipartisan presidential commission last week outlined a proposal to lop nearly $4 trillion from the projected federal deficit by 2020. “We didn’t leave anybody out of the cross hairs,” said former Republican Sen. Alan K. Simpson. He and his co-chairman, Erskine Bowles, a former Clinton White House chief of staff, proposed raising revenue with a 15-cent-per-gallon gasoline tax, and by axing $1.1 trillion in cherished tax breaks, including both corporate tax loopholes and deductions for mortgage interest. At the same time, income-tax rates would fall: The corporate rate would drop from 35 percent to 26 percent, and individuals would be classified in brackets ranging from 8 percent to 23 percent. Almost three-quarters of their deficit-shrinking medicine comes as spending cuts: Simpson and Bowles would cut the federal workforce by 10 percent, eliminate a third of overseas military bases, slash farm subsidies by $3 billion a year, and slowly increase the age at which full Social Security benefits could be claimed, from 65 today to 68 by 2050 and 69 by 2075.
Bowles and Simpson don’t have the support of a majority of their 18-member commission, let alone Congress, and the reactions to their proposal suggest they won’t get it. Democratic House leader Nancy Pelosi called the plan “simply unacceptable,” earning an indirect slap-down from President Obama, who said, “I think we need to listen.” Conservative groups said they would oppose any plan that raised taxes and revenues. “I think that is something that would not sit well with members of the Tea Party,’’ Houston Tea Party organizer Ryan Hecker said.
What the editorials saidThere’s a “Goldilocks appeal” to a plan that drives both Pelosi and anti-tax militant Grover Norquist to apoplexy, said the Baltimore Sun. But precisely because it represents “political suicide for both Republicans and Democrats,” this plan is a put-up-or-shut-up moment for two major political forces that got to Washington by “promising to end politics as usual”—namely, Barack Obama and the Tea Party activists.
With this thoughtful plan on the table, now we’ll find out “who is serious about governing, and who is interested only in political dodgeball,” said the New York Daily News. “All the Republicans who campaigned by calling for cuts, cuts, and more cuts” now have to get specific. Democrats will have to acknowledge that their own sacred cows, Social Security and Medicare, have to go under the knife. Unfortunately, this plan “barely makes a dent” in entitlements, said Investor’s Business Daily. Raising the retirement age for Social Security makes sense, by why wait until 2050 to put that into effect? The cuts to Medicare are “minor.” It’s the future, unfunded costs of entitlement programs that threaten to “bankrupt our country.”
What the columnists saidSimpson and Bowles have given us “a cold shower after a night of heavy drinking,” said David S. Broder in The Washington Post. Their message that sacrifices are necessary across the board will isolate and shame any politician who pretends there are “painless ways to dig out of the monumental fiscal pit we have fallen into. It’s sober-up time.” That also goes for Republicans, some of whom have been resisting any cuts in defense, Medicare, and Social Security, said Michael Tanner in National Review Online. It might be “a good political tactic” to defend these programs, but “to actually bring the budget into balance by 2019” will require across-the-board cuts.
Get real, said Annie Lowrey in Slate.com. Even the co-chairmen know it’s a “fantastical impossibility” that this plan will go anywhere in a political environment where an interest group lies behind every spending program. “No Congress, no matter how fiscally prudent, would ever enact this plan.”
We can and should fight over the details, said Andrew Sullivan in TheAtlantic.com, but Simpson-Bowles is “a breakthrough.” This proposal can begin a serious conversation about the debt we’re handing to future generations, which is “a profound moral issue.” If Obama is wise, he will make reducing the deficit the key domestic objective of his next two years in office. Success would be “one of Obama’s core legacies.”