Coburn’s $9 trillion debt plan
posted at 8:48 am on July 18, 2011 by Ed Morrissey
Late last week, it looked like Tom Coburn might rejoin the Gang of Six in the Senate, which restarted their efforts to find a compromise on the budget as the debt-ceiling limit debate rages. Today, however, Coburn will become a Gang of One by releasing his own plan to reduce the deficit by twice the amount of the Paul Ryan plan. Unlike Ryan, Coburn plans on increasing federal revenues, but through reform of the tax code:
Sen. Tom Coburn (R-Okla.) said Sunday the federal government can save $1 trillion though tax reform, a proposal that will put him at odds with some GOP colleagues.
Coburn plans to unveil a $9 trillion deficit-reduction package Monday that would give lawmakers a menu of policy options to reduce the deficit.
Coburn has suggested $1 trillion in savings could come from eliminating special tax breaks, such as the tax subsidy for ethanol, which he has fought to end.
“We can increase revenues by adjusting the tax code and lowering it,” Coburn said on CBS’s “Face the Nation” Sunday morning. “We can save over $1 trillion doing that.”
Coburn’s plan also relies on cutting one trillion dollars from the Pentagon’s budget over the next ten years. That would be greater than a 10% reduction in spending at the Pentagon, a component that won’t make his fellow Republicans very happy, even if it does provide a “skin in the game” argument to conduct seven trillion dollars of cuts elsewhere, in discretionary and entitlement spending.
Coburn calls it “common sense” that the Pentagon’s budget can be reduced by this amount, but it’s only “common sense” if the cuts come as part of a redefinition of the use and extent of American military power around the globe. We can’t fight three wars and expect to literally decimate defense spending over the next decade, and we probably can’t afford our heavy investment in Europe, either. If those cuts come as part of a rethinking of America’s political and military approach, then it’s certainly possible, but it will mean a serious rethinking of our role in global security.
That’s exactly the approach that Coburn does take with federal revenues. Instead of just hiking taxes or only “closing loopholes,” Coburn wants to lower overall rates while flattening and simplifying the system. That takes some of the sting out of revenue increases and gives both parties something to win. Republicans get their tax reform and simplification, and Democrats get to take credit for more “fairness” through the elimination of arcane tax deductions, especially in the corporate tax code. That kind of compromise has been easily achievable — and almost entirely ignored by the White House.
When Coburn unveils his plan later today, he will have trumped his former Gang of Six colleagues and could perhaps vault to the front of the debate over the debt and deficits. The Gang is still mulling over its options, and the Senate has now gone 809 days without passing a budget plan at all. The White House still won’t offer specifics for a resolution to the impasse. So far, it seems all of the ideas have come from the Republicans, while Democrats dither and delay.
Breaking on Hot Air