The National Commission on Fiscal Responsibility and Reform met yesterday. The high-powered group of politicians, economists and business leaders is due to tell the nation how to deal with its deficit in a report expected in two months.
The co-chairs are former White House chief of staff Erskine Bowles and former Sen. Alan Simpson.
They have a thankless but critically important assignment: persuading Americans that they must accept substantial tax increases and painful spending cuts to keep the nation from careening off a fiscal cliff.
This year’s deficit will come in between $1.3 trillion to $1.5 trillion. Unless the nation changes course boldly, and soon, economic disaster looms.
Placing blame won’t help. The fact is that the budget surpluses enjoyed in 2000 and 2001 gave way to nine straight years of ever-increasing deficits. Without a fundamental shift in direction, the United States dollar will lose much of its value and America’s standard of living will fall sharply.
What must be cut? Let’s start with Social Security, Medicare and the Department of Defense. Those are the three big spenders; the three spenders that have grown and grown and will keep on growing unless they are trimmed back. If the Commission on Fiscal Responsibility issues a fiscally responsible report it will call for raising the retirement age, reducing pensions to the well-to-do and raising the amount of individual income that is subject to the Social Security tax.
It will also demand that the United States reduce the amount it spends on health care until it approaches the levels spent in other wealthy nations such as Canada, Great Britain, France, Germany and Japan. America simply can’t afford a health care system that costs 30 to 50 percent more than other nations spend to provide adequate care to all of their residents.
The Commission will also demand fundamental reform in the way U.S. defense dollars are spent and observe that the fastest road to reforming the system will be to stop giving the Pentagon a signed blank check every budget season. Putting the military on a strict diet will stop some pork-barrel appropriations that do more to re-elect members of Congress than to strengthen our armed forces.
Cutting spending won’t do the job alone. Taxes must rise, too. The tax reductions passed by Congress in 2001-3 will cost the treasury about $1.8 trillion over their first decade. Federal income will drop even further in the years ahead unless taxes rise.
At present, federal taxes amount to about 19 percent of the gross national income. They have been as high as 23 percent in the past. Raising them back to that level would be a huge step toward solvency. And, yes, America can afford to tax itself enough to pay the cost of its government.
WILL THE commission report be responsible and advocate the needed reforms? Let’s hope so. Bowles, Simpson, et al, have nothing to lose by being honest, forthright and bold. President Obama desperately needs a hard-hitting set of recommendations if he is truly determined to tackle fiscal reform. Democrats should be told that social programs must be cut back. Republicans must be convinced that federal income must equal federal outgo and advocate a level of taxation that makes that possible.
Or, to sum it up, the United States of America must become fiscally responsible and reform itself. Or give up its greatness.
— Emerson Lynn, jr.
