With two months to go before the New and Improved Congress takes center stage, the war of words is already under way about how to solve the nation’s runaway debt.
The first salvo has been fired by the bipartisan panel appointed by the president to develop recommendations for spending cuts that will make meaningful reductions in the deficit.
This, following the recent fruit basket turnover in Congress, with voters sending the message: We want you to take a sledgehammer to big government and get the country’s financial house in order.
The commission’s 50-page plan, which is only a draft and hasn’t a snowball’s chance of approval, nonetheless launches what will be an acrimonious debate on where cuts will be made. It would, the panel says, reduce the budget to sustainable levels by 2015, cut the national debt to about $3.8 trillion by 2020, about 50 percent less than the $7.7 trillion it would otherwise be, and would (theoretically) balance the budget by 2037.
Commission co-chairs Alan Simpson, retired Republican senator from Wyoming, and Erskine Bowles, White House chief of staff for President Clinton, prefaced the proposal with Guiding Principles and Values, including: “America cannot be great if we go broke,” “The problem is real; the solution is painful; there is no easy way out; everything must be on the table; and Washington must lead,” etc.
A lot of cows, sacred and otherwise, would feel the rapier, including slashing or eliminating the decades-old tax deduction for interest on home mortgages and hiking the tax on capital gains and dividends.
In the mandatory savings category, to no one’s surprise, agriculture would take a hit: “Reduce farm subsidies by $3 billion per year by reducing direct payments and other subsidies, Conservation Security Program funding, and funding for the Market Access Program.”
Federal money for agriculture has increasingly been in the crosshairs of budget cutters, and with an ever-more urban Congress, a massive national debt, and exceptionally strong prices for major commodities, there will be even more pressure to eliminate or drastically scale back farm programs.
The plan recommends cuts of $100 billion in defense programs and $100 billion in domestic programs, including a three-year freeze on salaries, bonuses, and other compensation for most federal employees and non-combat military pay, elimination of all congressional earmarks (lotsa luck with that), a reduction of 10 percent in the federal workforce, and on and on.
Other cuts would come in Medicare, Medicaid, and various health care programs. Social Security would be revamped to raise the retirement age and increase the amount of wages on which Social Security taxes would be paid.
The panel’s recommendations are only a first draft, with the full commission’s report due by Dec. 1. Then comes the knock-down, drag-out over which, if any, of the measures will be applied to the 2012 budget.