DOA: Deficit Commission likely to reject chairmen’s plan to reduce national debt; Update: “Unacceptable,” says Pelosi

posted at 4:20 pm on November 10, 2010 by Allahpundit

We’re not serious. Yet.

Leaders of President Barack Obama’s bipartisan deficit commission on Wednesday proposed reducing the annual cost-of-living increases in Social Security, part of a bold plan to control $1 trillion-plus budget deficits…

As proposed, the plan by Chairman Erskine Bowles and former Sen. Alan Simpson (R-WY) doesn’t look like it can win support from 14 of the commission’s 18 members to force a debate in Congress. Bowles is a Democrat and was former President Bill Clinton’s White House chief of staff.

Cuts to Social Security and Medicare are making some liberals on the panel recoil. And conservative Republicans are having difficulty with options on how to raise tax revenue. The plan also calls for cuts in farm subsidies, foreign aid and the Pentagon’s budget.

Lost in all the buzz this afternoon about the Bowles/Simpson blockbuster proposal (PDF here) is that this isn’t the Commission’s final recommendation, which is supposed to be presented to Obama in three weeks. This is merely Bowles’s and Simpson’s own plan, released publicly in hopes that the jolt from media coverage will pressure the rest of the Commission’s members into striking some sort of compromise before the deadline. It’s a conversation starter, in other words, except that the main subject of “conversation” thus far is how horrified the rest of the committee is by some of the recommendations:

“This is not a package that I could support,” Representative Jan Schakowsky, an Illinois Democrat, said during a break in a private meeting by the commission. She said any package able to win 14 votes on the panel would have to look “very different” from the options being discussed…

“We’re not going to have an up-or-down vote on this,” said Durbin. “There are proposals in there that are painful. I told them I said there are things in here which inspire me and other things which I hate like the devil hates holy water. I’m not going to vote for those things.”

Some Republicans also expressed skepticism that the report would survive in its current form. New Hampshire Senator Judd Gregg called the plan a “starting point.” Representative Jeb Hensarling of Texas said “some of it I like, some of it disturbs me.”

Mind you, this “starting point” has arrived some nine months after Obama created the Commission, which he did only after a congressional attempt to create a different deficit commission died in the Senate. As for the specifics of the proposal, Tapper has a full rundown here although I recommend his post mainly for the apocalyptic quotes from hysterical progressives furious at the thought of reforming Social Security or — gasp — reducing the highest income tax brackets, both of which are endorsed by Bowles/Simpson. Sample reaction from Obama pal and AFL-CIO chief Richard Trumka: “The chairmen of the Deficit Commission just told working Americans to ‘Drop Dead.'”

TPM has a useful, detailed bullet-point summary of recommended spending cuts, tax increases, and entitlement reforms, but if you’re only interested in a broad overview, this CNN piece is better. Provisions to please conservatives: A huge tax overhaul, highlighted by a new top income tax bracket of just 23 percent; Social Security solvency via gradually raising the retirement age and reducing COLA; eliminating 10 percent of the federal work force by 2015; and various measures to slow the growth of Medicare. All in all, according to the Times, the plan calls for $3 in spending cuts for every $1 in revenue increases. And yet…

Even with the dramatic proposals, the Bowles-Simpson plan would leave deficits of about $300 billion in 2015, the year by which Obama tasked the group with balancing the federal budget, except for interest payments on a national debt that now stands at $13.7 trillion. If the changes to Social Security are dropped, the deficit would be about $400 billion in 2015…

“We’ll both be in a witness protection program when this is all over, so look us up,” Simpson told reporters.

If anything, says Samuel Staley at NRO, the plan doesn’t go far enough. And yet, it’s already dead on arrival because of how far it is willing to go. In fact, think of it as the flip side of Paul Krugman’s eternal whining about how the stimulus really should have been $2 trillion or $100 trillion or whatever: We’re working within very narrow political parameters here, even with tea partiers flying the flag of fiscal responsibility, such that even more drastic-yet-effective remedies are simply unthinkable. Never mind the Social Security tweaks; what’s going to happen when even fiscal conservatives learn that Bowles and Simpson want to take away the deduction for mortgage interest payments and add 15 cents per gallon to the federal gas tax? See Ace’s sobering thoughts for that.

I’m all about conversation-starting when it comes to entitlement reform these days, so today’s news is a moral victory if nothing else. Now all we need to do is find someone, anyone, who’s seriously willing to have that conversation. I’ll leave you with this clip of incoming Rep. Kristi Noem, a tea party favorite who’s likely to end up as the freshman voice on the GOP’s leadership team. Skip ahead to 3:15. She won’t give Candy Crowley a flat “yes” when asked whether it’s time to cut Social Security.

Update: The sage of San Francisco, fresh off her total destruction at the polls last week, has decided that the Bowles/Simpson plan simply won’t do.

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The commission’s recommendations are actually an endorsement of ObaMaoCare. The ironies are rich in that the boondoggle of a bill actually increases the deficit.

onlineanalyst on November 10, 2010 at 7:01 PM

So the presidential deficit commission recommends some politically painful cuts in such popular programs as Medicare and Social Security. Meanwhile, we have a hugely expensive and highly unpopular healthcare reform bill. Throw in the fact that deficit reduction is a function of budgeting, which is the direct responsibility of the House. Which is newly Republican. And since the healthcare bill probably can’t be easily repealed, but can very much be defunded…..

I can’t be the only one who sees a golden opportunity here. Say thank you to the nice people on the commission, then defund Obamacare, which would probably eliminate the need for cuts on Medicare and Social Security. Throw in the revenue-enhancing tax cuts. Businesses have money to spend right now, because they’re afraid to spend it. Remove the uncertainty that makes them hoard money, and we could start seeing a real recovery.

tom on November 10, 2010 at 8:00 PM

Democrats want more taxes and more spending.

Their core belief is that the government spends that money more responsibly for the common good than you do.


justltl on November 10, 2010 at 8:08 PM

You know what a Democrat considers a fair taxation rate?

You know who they think knows best how to distribute the fruits of labor in order to create a utopian society?
They do.

justltl on November 10, 2010 at 8:12 PM

As a means of societal control, single payer (government) health care will be to the commerce clause what a cannon is to a pea shooter.
The Dems know this.
That is why they allowed a few of their heads to be cut off the hydra.

Feel free to throw in a few of your own metaphors.

justltl on November 10, 2010 at 8:26 PM

If Obamacare actually takes firm hold here, look for the leftists to start talking about global health care.
Especially now that the global warming/cap and trade/wealth redistribution scam seems to have floundered.

justltl on November 10, 2010 at 8:40 PM

No mention of ending Drug Prohibition.

MSimon on November 10, 2010 at 9:50 PM

No mention of ending Drug Prohibition.

MSimon on November 10, 2010 at 9:50 PM

Only stoners and other truly stupid people took him seriously for one minute on that promise; it was a throwaway campaign ‘hook’ for whatever fish were dumb enough to bite. I remember laughing like a loon when he first hinted about it.

Dark-Star on November 10, 2010 at 9:56 PM

Hey, there is some good stuff in this report:
Lower tax rates to 8, 14, and 23% (from 15, 28, and 39). That’s great! With a drop in corporate tax rates to 26 from 35%! All tax write-offs are removed. I think that is great too. It returns some of the free market.

Each tax deduction written into the tax code is a method of government intervention in the markets and in social engineering.

JeffVader on November 11, 2010 at 12:01 AM

Brilliant! Screw the already-beleaguered American homeowner amidst an ongoing housing crash, accompanied by 9.6% unemployment, by taking away their mortgage tax credit (a substantial middle-class tax increase), and gut the one arm of the government whose existence is actually prescribed by the Constitution: Defense.

How is this different from what Liberals always want? Raise taxes on the middle class, gut the military, put on kid gloves when dealing with the illegitimate government functions that are actually bankrupting the country.I hope there’s a Hell for these scum. Simply rotting is too good for them.

Blacklake on November 11, 2010 at 1:25 AM

I think this is a good thing. To start this conversation. We are going to have to cut. We have to.

I think pushing the age of retirement is only logical. People live much longer than when SS was started and it was only meant for the very end of life, not 30 year retirement program.

And the year I heard was age 68 by the year 2050 or something. That seem perfectly reasonable! I don’t know why that is the third rail.

And some means testing is okay with me too.

petunia on November 11, 2010 at 2:38 AM

I have concluded that the state income tax deduction is a subsidy for the high-tax states, and should be repealed or greatly curtailed. People who elect state governments that impose high taxes should have to pay those taxes.

njcommuter on November 11, 2010 at 3:46 AM

…voluntarily removing oneself from SocSec, would be a great way to reduce future liabilities.

Un huh, and when a recession hits and they’re paying Soc Sec to illgals in exchange for their votes, you’re going to just sit there smiling? The amount you intend to save for a rainy day is already considered by them to be government property -in case you haven’t noticed the move they’re making on the 401-k’s.

Don L on November 11, 2010 at 6:00 AM

People who elect state governments that impose high taxes should have to pay those taxes


Perhaps you forgot to consider that much of the state tax burden is because of federal mandates and court decisions….hmmmmm?

Don L on November 11, 2010 at 6:02 AM

Talking to a businessman today and his interpretation of what he has heard about this is that they want to take the current 35% tax rate on his profits and instead apply a 26% tax rate to his gross.

He basically was saying right now the 35% is taxed on his profit whereas they want to get rid of deductions and change the rate to 26% (ie 26% of gross by definition). Am I missing something? Or is that really what they want to do?

I mean a company that is 10% profitable now (which is pretty profitable really) is basically paying 3.5% of it’s gross. Under the new plan they’d be paying 26% of their gross. Is this really a proposal to raise taxes on businesses 600%+?? That does NOT sound plausible to me, but I can’t put my finger on anything in the proposal to make me think they mean otherwise.

Anyone able to clear this up for me at all?

Sqrl on November 11, 2010 at 6:35 AM

There is no reason to cut SS. Simply do this:
(a) Starting in 2012, raise the retirement eligibility age for SS by 6 months each year.
(b) Continue until the age for full vesting is 75. That will take 20 years (six months per year to increase the age by 10 years from 65 to 75).

That is all that is required. That and nothing more. And since people live way longer today than when SS was started, and work longer also — no big deal.

This way we can honestly say — we are not cutting SS at all. And it will be true.

SunSword on November 11, 2010 at 6:53 AM

The ‘public option‘ is back. Who could have predicted that ? Other than everybody.

Skandia Recluse on November 11, 2010 at 7:34 AM

I think that some of these proposals will be adopted sooner rather than later. Especially the tax proposals positively impacting job creation. But first we will have a national conversation that will reveal liberal/progressives for the luddites they are. The linchpins are seniors, and/or independants who, I believe, will support wealth creation, realistic cuts in welfare spending, and a strong private Health Care system.
Let the fear mongering begin.


williars on November 11, 2010 at 8:14 AM

docjohn52 on November 10, 2010 at 6:23 PM

Some of their recommendations make some sense, but I didn’t see the BIG TICKET item….ObamaCare. That would be a a great start, closly followed by elimination if DOEd, EPA, HHS, Dept of Int., DOEnergy, each and every czar and staffs, NEA, Homeland security, NLRB, OSHA, and Commerce Dept.

In addition to getting rid of these leeches, they should revise the way they do business and put ALL programs and expenditures “ON BUDGET” and pass a balanced budget amendment with no exceptions or a requirement of 4/5 of BOTH houses to exceed the budget. Put some real teeth in ‘PayGo’.

belad on November 11, 2010 at 9:15 AM

I’m 57 and they can add a year to my retirement age right now. And I am just fine with getting rid of the mortgage interest write off as long as it coincides with the end of the Earned Income Tax Credit.

Cindy Munford on November 11, 2010 at 9:54 AM

My wish-list:

-Repeal/defund Obamacare

-Repeal the prescription drug plan

-Tax incentive to insurers who cover people with pre-existing conditions

-Reduce regulation on the insurance industry to allow competition and plans that are customizable.

-Energetically go after Medicare/Medicaid/SS fraudsters, including seizing of property for repayment; also take action to fire/strip of their pensions govt employees who knowingly grant SS/Medicare/Medicaid to ineligible people/don’t perform due diligence

-Re-negotiate more egalitarian trade agreements with partners (so Japan is more open to US cars, etc)

-Introduce tax incentive for companies that keep their HQ in the US and have a majority of their employees here

-Relax regulations on industry so we see rare earth metal mining, nuclear, (the incandescent light bulb!) and other industries perk up

-Personal income tax reform: flat tax on earners (making $25,000 or more?)

-Reform Fed employee pension and benefits plans. Presidential order revoking 1960’s order that allowed Fed employees to unionize.

-Reduce foreign aid/Adjust criteria for aid

-Move towards a balanced budget requirement

-All departments(except Defence)face an initial 10% reduction in costs. More to come

-Defence dept. will face a more critical eye to determine what cuts or optimisations – if any – should be implemented

-Privatize the TSA’s functions

-Clarify the birthright citizenship law to reflect what the authors intended, thereby reducing anchor babies & the lure for many illegals

– US govt out of any interest in Ford, AIG, etc. Also out of student loans and all other loans. Tax breaks for organisations that offer loans to seniors, vets, disabled, etc. at competitive rates.

Then we’ll see where we are and cut some more.

linlithgow on November 11, 2010 at 3:43 PM

It’ll be interesting to see which politicians, of either party, support raising taxes. I’ll have to print out a list and keep it handy for ’12.

They can cut spending all they want, though. I think Americans will accept spending cuts before they’ll accept tax increases. The Democrats have the low ground on this, I think.

FloatingRock on November 11, 2010 at 8:53 PM

Sqrl on November 11, 2010 at 6:35 AM

They would still pay taxes on their net income (revenue less expenses), not gross income. So they could exclude cost of goods sold, administrative costs, taxes and interest, etc. from the amount being taxed.

Jimbo3 on November 12, 2010 at 11:45 AM