Erskine Bowles and Alan Simpson, co-chairmen of the deficit reduction commission, put a plateful of their ideas on the table last Wednesday, more than two weeks before the Dec. 1 due date President Barack Obama had set.
Bowles, former chief of staff for President Bill Clinton, and former Sen. Simpson, a Republican who served as party whip for 10 of the 16 years he was in the Senate, know their proposals are hard-hitting and don’t expect them to be approved as proposed by the other 16 members of the commission.
Both liberals and conservatives attacked them vigorously within hours of their release — which may mean they should be adopted by the president as his own and pushed with all his might.
As Bowles and Simpson clearly understand, there will be no reduction of the deficit without cuts in spending and increases in revenue.
Moreover, the cutting must be done where the biggest share of the money is being spent: Medicare, Medicaid, Social Security and defense. Taxes must be raised on those who have the revenue to pay them: the upper half of the nation’s earners.
Bowles and Simpson propose to “slaughter a whole herd of sacred cows,” one reporter observed. Among them: tax-free medical insurance provided to workers; the deductibility of mortgage interest; retirement at age 62 on Social Security.
They also would reinstate the estate tax at a 45 percent rate on estates worth $3.5 million for individuals or $7 million for couples. Lower tax rates for capital gains or income from dividends would be gone.
They propose reduction of discretionary spending, such as much of the defense budget, and other federal bureau budgets. The retirement age under the Social Security program would rise very slowly to 69. Farm subsidies would be cut $3 billion a year. Pensions and benefits to government employees from the civil service and the military would be cut.
Pension benefits for the wealthiest 50 percent of the retirees on Social Security would be reduced and the amount of income subject to the Social Security tax would be raised over the next decade to $190,000 a year from today’s $106,000.
“We have harpooned every whale in the ocean — and some minnows,” Simpson told reporters, joking that he and Bowles “will be on the witness protection list when this is over.”
But some critics were heartened:
“A White House commission has put a credible plan to eliminate the deficit and debt before us. This has changed the rules of the game, and, for the first time, things are serious,” said Mya MacGineas, president of the bipartisan Committee for a Responsible Federal Budget.
“After this,” she said, “the debate simply cannot go back to silly games where people pretend that eliminating earmarks will solve the problem.”
PRESIDENT OBAMA can energize the debate as his entire commission writes its report by agreeing that spending must be cut and taxes raised and putting the full weight of his administration behind those inescapable realities. They are, in cocktail party parlance, the elephants in the room.
Responsible leaders from both parties must join him if the United States is to stop its descent into the second-class ranks of the world’s financial powers.
Republicans must agree that taxes must be raised and some tax breaks erased. Democrats must agree that social programs such as Social Security and Medicare must be pared back. The nation as a whole must be willing to take whatever steps are needed to bring the cost of medical care in the United States down until it at least approaches that spent by other rich nations in the world.
President Obama doesn’t have the power to order in fiscal sanity by fiat. But unless he buckles on his armor, wades into the battle at the front of his troops and makes it known that he will be the last to leave the field, it will not be won.
— Emerson Lynn, jr.
