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by Don Azarias
January 7, 2011
In a column I wrote dated September 10, 2010 entitled “Obama, The Democrats And U.S. Debts”, I made mention of the 18-member bi-partisan commission created by President Barack Obama called the National Commission on Fiscal Responsibility and Reform (NCFRR) headed by co-chairmen, Erskine Bowles, the White House chief of staff under President Bill Clinton and Alan Simpson, a former Republican senator from the state of Wyoming.
The NCFRR was created in response to the American public’s outcry about the growing federal budget deficit and government’s debt. Specifically, the Commission will propose recommendations designed to balance the budget, excluding interest payments on the debt, by 2015. It will recommend the needed measures to cut government spending and to increase taxes while at the same time trimming or doing away with many popular tax breaks such as the home mortgage deduction. Both, co-chairmen, Bowles and Simpson, endorsed the plan. But the big question is: Will the other members of the bipartisan commission go along? The answer is no, since it failed on December 3rd to advance after it garnered only 11 instead of the 14 votes needed to officially send the plan to Congress for consideration. Those 11 members of the commission included both Democrats and Republicans.
Now what’s next? Will it be the end of this great plan that was designed to resolve the United States’ financial crisis? Or will it be resurrected and passed into law by principled congressional lawmakers? Or will it be voted down by lawmakers who are more concerned with earmarks and other pork barrel appropriations?
While it’s facing a hard sell from both left and right on Capitol Hill, even opponents called it a starting point for efforts next year to control the nation’s unsustainable deficit and ballooning debt. The proposals would theoretically cut $4 trillion from the federal budget over the next decade.
“It’s a template that gives people an opportunity to start discussing what we have to do to get our fiscal house in order,” said Rep. Xavier Becerra (D-California), a member of the panel. While some of the commission members expressed strong opposition to some of the proposals, nearly all expressed satisfaction with the fact that the commission managed to bring the national deficit to the forefront of national debate.
Winning over lawmakers appeared to be the biggest challenge because of differences in each party’s ideology and political platform. Republicans reject tax increases for the wealthy and Democrats balk at cuts in social programs, including raising the Social Security retirement age and cuts to Medicare. Both, Democrats and Republicans, however, seem willing to extend most of the tax cuts. However, some rebelling Democrats want to let cuts for the wealthiest Americans expire, citing damage to the federal deficit from lost revenue as a main argument. But, I believe that, ultimately, they’ll find a common ground.
The most significant proposals in the plan are as follows: It calls for sweeping tax changes that would affect millions of Americans. It also calls for increase in federal gas tax. It would also make deep cuts in military spending, slash the federal work force, raise the retirement age for full Social Security benefits and make cuts in Medicare. It aims to reduce federal red ink by nearly $4 trillion within a decade as I mentioned earlier. Finding common ground between Democrats and Republicans——the two major political parties with different plaftorms could prove to be very difficult. But both, the taxpayers’ and political leaders’ concern about the depth and breadth of the nation’s financial woes, have made every American focuse on adapting the bold measures needed to eliminate government deficit and debt that threaten the survival of the United States as a nation.
To win over some Democrats, there’s now an exemption from the higher Social Security age——the plan would raise the normal retirement age to 68 by 2050 and 69 by 2075——for people who perform physical labor.
Also, Bowles and Simpson said that to help economic recovery, Congress should consider a “temporary payroll tax holiday” in 2011 that would allow workers to forgo paying Social Security taxes for a year. The report said that, while this would cost $50 billion to $100 billion in lost revenue, it would result in “significant short-term economic growth and job creation.” Proposed cuts in payments to hospitals that serve more Medicaid patients were dropped, while cuts to agriculture subsidies were scaled back sharply. Tax breaks like the earned income tax credit and the deduction for charitable contributions were added back.
The government, for the very first time, would set an overall budget for federal health care programs that cover more than 100 million people. The proposal would leave in place Obama’s signature health care law expanding coverage to more than 30 million uninsured, but it would repeal a new long-term care program included in the legislation, calling it “financially unsound.” For Medicare recipients the biggest change would be an increase in cost sharing for medical services. Supplemental insurance plans that many seniors purchase to plug gaps in Medicare would no longer be able to offer full coverage.
As a taxpayer, I’m for the implementation of the NCFRR’s plan and urge my fellow Americans to support it. At the start, it would really be painful for everyone impacted by it. But with this great nation going through a severe financial crisis, belt-tightening, frugality and other tough economic measures must be imposed sooner rather than later. Everyone must share in the sacrifices that we are bound to experience as a result of this plan. And, in the long run, it would be in the best interest of the United States that we did so.