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Deficit reduction by the numbers

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Thursday, November 11, 2010 - 6:46pm

It is ambitious and controversial, and it would cut massive chunks from future federal budget deficits.
 

It is a proposal from the co-chairs of the Federal Deficit Commission, and the howls of protest have already begun.
 

Originally, Senators Kent Conrad, a Democrat, and Judd Gregg, a Republican, wanted a commission to make binding recommendations to cut the deficit.
 

That was filibustered to death, so the President set up a bi-partisan panel, and yesterday, the co-chairs Erskine Bowles and former Senator Alan Simpson produced their proposal.
 

The reactions were immediate and incendiary.
 

The dramatic proposal would touch every American and alter 2 economic cornerstones--the mortgage interest deduction and social security.

The plan would:

*reduce future cost of living adjustments for social security and gradually raise the retirement age to 68

*rein in health care spending and make Medicare recipients pay more

*cut $200 billion from a broad array of government programs, half from defense.

The co-chairs of the commission--who drafted the recommendations--acknowledged they are highly controversial.

On the tax side, the plan calls for eliminating or scaling back the home mortgage deduction and most other popular writeoffs. Those tax increases would be partly offset by lower, simplified tax rates.

Also proposed: a 15-cent a gallon increase in the gasoline tax to fund highway spending.

Almost all of the proposals would be phased in gradually, beginning in the next few years.

But they were immediately denounced by the right, as a "as excuse to raise net taxes on the American people."... and by the left, as an attack on the middle class.

Co-chairman Erskine Bowles argues that something has to be done and soon. Bowles is the Former Chief of Staff to President Clinton, and Simpson spent decades in the Senate.
They know Washington and the art of the possible. How possible any of this is, is up for debate.
 

The 18 member commission has to vote on this, or some for of it, and if 14 vote yes, it goes to the Senate for debate and a vote.
 

If it passes there, it then goes to the House.
 

Congressman Jeb Hensarling is on the Commission, but has not endorsed this plan.
 

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