FISCAL COMMISSION WRAPS UP WORK EARLY…. The White House’s “National Commission on Fiscal Responsibility and Reform” — the 18-member panel tasked with deficit-reduction planning — wasn’t scheduled to report on its work for several more weeks. By all accounts it’s been a struggle, with the goal of producing a “consensus” report enjoying the support of at least 14 members.
The fact that the commission appears to have wrapped up its work, with a report from its chairs due today, suggests the panel did not reach its goals.
A draft proposal to be released Wednesday by the chairmen of President Obama’s bipartisan commission on reducing the federal debt calls for deep cuts in domestic and military spending starting in 2012, and an overhaul of the tax code to raise revenue. Those changes and others would erase nearly $4 trillion from projected deficits through 2020, the proposal says.
The plan would reduce Social Security benefits to most future retirees — low-income people would get a higher benefit — and it would subject higher levels of income to payroll taxes to ensure Social Security’s solvency for at least the next 75 years.
But the plan would not count any savings from Social Security toward meeting the overall deficit-reduction goal set by Mr. Obama, reflecting the chairmen’s sensitivity to liberal critics who have complained that Social Security should be fixed only for its own sake, not to balance the nation’s books.
The proposed simplification of the tax code would repeal or modify a number of popular tax breaks — including the deductibility of mortgage interest payments — so that income tax rates could be reduced across the board. Under the plan, individual income tax rates would decline to as low as 8 percent on the lowest income bracket (now 10 percent) and to 23 percent on the highest bracket (now 35 percent). The corporate tax rate, now 35 percent, would also be reduced, to as low as 26 percent.
That’s all very interesting, I suppose, though the political prospects of any of this are, at best, highly dubious.
But it’s worth emphasizing a rather important detail: these recommendations are not the result of a commission consensus. On the contrary, they’re reportedly included in a draft published by the commission’s chairmen — former Clinton White House chief of staff Erskine Bowles, and former Wyoming Sen. Alan Simpson (R).
In other words, Simpson and Bowles have all kinds of ideas about raising the retirement age and cutting Medicare benefits, but that’s not the collective judgment of the commission they’ve led.
At this point, the two chairs still hope to get the support of 14 of the 18 members, but that appears to be a stretch, and it’s likely members won’t even vote at all. One also assumes the chairs would also love the White House to embrace their document, but I’m guessing that’s unlikely, too.