The Free Press, Mankato, MN

November 13, 2010

Our View: Don’t dodge deficit draft plan

The Free Press

— The co-chairmen of the so-called deficit commission last week unveiled a draft proposal for getting the federal government back to something resembling fiscal responsibility, and members of Congress would do well to take it seriously and act on it.

Former Republican Sen. Alan Simpson, of Wyoming, and former Clinton Chief of Staff Erskine Bowles unveiled a draft proposal for discussion among commission members that was lauded by the nonpartisan budget watchdog group The Concord Coalition as a “very promising start.”

The President’s National Commission on Fiscal Responsibility and Reform is set up as a bipartisan commission by executive order of President Obama. It has been charged with making a recommendation to Congress on getting the federal fiscal house back in order.

The chairmen are well-respected in both parties. What they recommend should carry influence. The Concord Coalition says they have “made good on the promise of the commission to scrutinize all aspects of the budget.”

The chairmen’s proposal has taken aim at not only  spending programs, but cost-saving reforms to Social Security, Medicare, farm subsidies, government retirement programs and defense spending.

They also recommend broadening the coverage of some taxes while reducing the rates and doing away with special interest industry tax credits, better known as corporate welfare.

It’s unfortunate that Democratic leaders, like soon-to-be former Speaker of the House Nancy Pelosi, have already declared some of the Social Security ideas “unacceptable.” That’s staking out a gridlock position before the issue can be studied by the full commission and other reasonable people.

As of Thursday, there did not seem to be a similar “no deal” position by the Republican side on the tax increases. Good for them. They seem to have serious people willing to study the proposal. The commission is to make a recommendation to Congress by Dec. 1.

Clearly, the plan is painful medicine for almost every constituency in America, but as the chairmen of the commission point out, Americans have a history of sacrifice if they believe it will make the future better for their children.

It’s hard to see how this is not a step in that direction.

The draft report calls for $200 billion in spending cuts by 2015, with $100 billion in savings in the defense area and $100 billion in savings in domestic programs. Some of the defense cuts include adopting recommendations by Defense Secretary Robert Gates to reduce defense department overhead, freezing non-combat pay and other defense department pay for three years and cutting defense contracting (presumably including the $485 million backup jet engine program Gates said he doesn’t need.).

Domestic cuts include freezing federal worker pay for three years, cutting the federal workforce by 10 percent, cutting 250,000 non-defense contractors, slowing the growth of foreign aid and eliminating all earmarks.

On the tax side, the draft report suggests making only three individual rates and one corporate rate, and eliminating $1.1 trillion of tax “expenditures” or tax breaks to businesses and individuals. While the plan suggests cutting the mortgage deduction — a huge boon to the middle class — it says an option would be to add it back in and adjust tax rates accordingly but they would still be lower than current rates.

In all, the draft proposal offers three options for tax reform. Certainly, the full commission and Congress should be able to mix and match and come up with a compromise.

Elected officials of all stripes seem to take away the message from the recent election as a call for leaders to come together to solve the fiscal mess. Trying to quash the honest work of this commission should be seen as a sign that more elected leaders need to go.

Congress needs to embrace this commission’s work, and use it to come up with reasonable solutions to reducing and eliminating America’s deficits, which will sooner or later create a crisis where reason might not prevail.