The Fiscal Commission's Co-Chairs' Plan

Thu, 11 Nov 2010 13:12:23 +0000

The private deliberations of the fiscal commission must be something quite interesting to generate the early release of a blueprint like this by the panel's co-chairmen. 

The blueprint has five main elements:

  1. Reduce discretionary expenditures by $200 billion a year from the Pentagon and other federal agencies
  2. Tax reform -- broadening the base and lowering the rates (again)
  3. Cost-cutting in Medicare
  4. Reduced farm subsidies and lower benefits for civil and military retirement
  5. Social security reform -- phase in higher maximum taxable earnings, lower replacement rates at higher incomes, and higher retirement ages; add in protections for low-income workers and a hardship exemption at age 62

Here are some reactions from budget observers reported in The Washington Post:

"A White House commission has put out a credible plan to eliminate the deficit and debt. This has changed the rules of the game and, for the first time, things are serious," said Maya MacGuineas, president of the bipartisan Committee for a Responsible Federal Budget, who hailed the blueprint as "a breakthrough."

"After this," she said, "the debate simply cannot go back to silly games where people pretend that eliminating earmarks will solve the problem."

I hope Maya is correct.  What the blueprint is doing is showing tangibly the scale of the changes that need to be made in order to achieve deficit reduction goals that are serious but not extremely ambitious.  I think people understand that.  But that hasn't motivated them to act.  Consider this reaction, from outgoing Senator Judd Gregg:

Republicans were equally leery of the proposal. Asked whether he could support it, Sen. Judd Gregg (N.H.), the senior Republican on the Senate Budget Committee, said no. "This is the starting point. It shows the size of the problem, which is massive," Gregg said. "This is the draft for discussion purposes to get us all thinking."

I hope that while they are all thinking, they dont' think about weakening the blueprint.  Of course, they may not have to face quite that challenge.  It is not even clear that the whole commission will support the co-chairmen's blueprint.