The preliminary release last week of President Obama's National Commission on Fiscal Responsibility and Reform to tackle the nation's fiscal problems provoked howls of disapproval last week by conservatives and liberals alike, though the media immediately focused on outgoing House Speaker Nancy Pelosi's comment that the document should be DOA. Then again, it does make sense that liberals have been most outspoken, since according to columnist Al Hunt, the plan would involve $3 in spending cuts for every $1 in higher revenue.
The commission seeks to reduce the deficit to 2.2 percent of gross domestic product by 2015, from 9 percent today, and cut the overall debt to 60 percent of G.D.P. by 2024; under current projections, it would rise to 87 percent by 2020.
Over the weekend, however, and legislators expressed hope that the document could be a template for engaging in what Tampa area Democratic Congresswoman calls a "robust debate," after going through all of the details listed in the 50 page report.
"I'm not in favor of raising the retirement age for Social Security, " Castor told CL on Saturday afternoon in East Tampa, mentioning one of the risible parts of the report that has antagonized Democrats, a call to raise the age for receiving Social Security benefits to 68. "Looking at all of the hard working people that I represent, that work in the hot sun, day in and day out, at the port, at the airport, in construction, and sometimes their bodies wear out by 65. So I think there are other approaches."
On ABC's This Week, North Dakota Democratic Senator Kent Conrad sounded like he liked what he saw in the report, saying that there had too been too much emphasis on the "most extreme options."
Conrad: But, look, the important thing for people to know is we are borrowing 40 cents of every dollar we spend. That's utterly unsustainable; it can't continue much longer, so it's got to be dealt with.
If you look at our spending, it's the highest it's been as a share of our economy in 60 years, revenue is the lowest it's been as a share of our economy in 60 years, so we're going to have to work both sides of the equation.
It's critically important we do or we will become a second-rate economic power. That is the hard reality.
AMANPOUR: But in terms of things like mortgage interest and all those things that the panel is recommending, these are things that Americans have really relied on forever, just about, and so many of them. Is that even a starter?
CONRAD: Well, there is — as I referenced earlier, there is one proposal that eliminates all the tax preferences, all the tax deductions, all the tax exclusions, and uses 90 percent of the revenue to reduce rates, only 10 percent to reduce the deficit. I don't favor that approach.
I think we need something that represents a continuation of the mortgage deduction, although reformed, to apply only to primary residences, for example, but we need to continue the child credit, we need to continue the earned income tax credit.
But fundamentally, if we're going to raise revenue, I don't think the way to do it is to raise rates. I think the way to do it is to eliminate some of the loopholes that exist in the system. We have a tax system now that is just loaded — chockablock full of preferences, loopholes. We're allowing $100 billion a year to be lost to offshore tax havens, another $50 billion to abuse of tax shelters. That can't be allowed to continue.
Speaking up for the Commission's initial foray is former Obama OMB Director Peter Orszag, who writes in an op-ed in Mondays' NY Times that the White House "has been handed a highly progressive reform plan for Social Security that could attract Republican support as well."
So it would be desirable to put the system on sounder financial footing. And that is precisely what the co-chairmen of President Obama’s bipartisan commission on reducing the national debt have bravely proposed to do. It’s too bad their proposal has been greeted with so much criticism, especially from progressives — who really should look at it as an opportunity to fix Social Security without privatizing it. Although the plan leans too much on future benefit reductions and not enough on revenue increases, it still offers a good starting point for reform.
This article appears in Nov 11-17, 2010.