Editore"s Note
Tilting at Windmills

Email Newsletter icon, E-mail Newsletter icon, Email List icon, E-mail List icon Sign up for Free News & Updates

November 10, 2010

THE FISCAL COMMISSION APPEARS TO HAVE WASTED ITS TIME.... Following up on an earlier item, the White House's "National Commission on Fiscal Responsibility and Reform" has released a plan from its chairmen on how to balance the budget. At its core, that's pretty much all it is -- a report from former Clinton White House chief of staff Erskine Bowles and former Wyoming Sen. Alan Simpson (R) on their vision for fiscal reform.

But those worried that the fiscal commission might actually present a plan that does real damage can relax. No one could possibly vote for any of this. Megan Carpentier's summary was a good one:

Their recommendations are more or less a list of the third-rail issues of American politics, including cuts in the number of federal workers; increasing the costs of participating in veterans and military health care systems; increasing the age of Social Security eligibility; and major cuts in defense and foreign policy spending. They also encompass a range of tax system reforms that have been floated by many in Washington for years to little effect, including reducing tax rates by eliminating many beloved credits and deductions.

The top-line changes are likely to get the most attention, including Medicare cuts and undermining Social Security.

But some of the other provisions in the chairmen's plan are just head-shaking recommendations, pointing to things that simply won't happen. Some of my favorites -- and by "favorites," I mean ideas that I found astounding, not ideas I actually approve of -- include the elimination of hundreds of thousands of federal workers, the elimination of subsidized student loans, new costs imposed on veterans for their health care, cutting schools on military bases, and new entrance fees at the Smithsonian.

Sorry, you freeloading school kids.

And to think, 14 out of 18 commission members weren't ready to endorse this. Imagine that.

Also keep in mind, the cuts could be less severe in the Simpson/Bowles model if only they cut taxes less. But this plan calls for dropping the top marginal rate to just 23%. Under Clinton, it was 39.6%. Under George W. Bush, it was 35%.

I've seen some suggestions that the report, such as it is, should be considered "controversial." But that's not quite right. It's better to call this what it is: hopelessly irrelevant.

Indeed, I suspect in a couple of months, this commission will have been almost entirely forgotten, mentioned only as a point of ridicule for what not to do.

Steve Benen 3:05 PM Permalink | Trackbacks | Comments (37)

Bookmark and Share
 
Comments

Indeed, I suspect in a couple of months, this commission will have been almost entirely forgotten, mentioned only as a point of ridicule for what not to do.

Yet creating this Catfood Commission was a huge mistake for Obama. What should have been a compelling election issue for the Democrats: Republicans want to cut your Social Security! turned into "They hate Social Security more than we do, trust us on this".

Like so much else of Obama's first term, Republican Lite didn't convince the people who vote for Democrats, and didn't win votes from the troglodytes.
~

Posted by: ifthethunderdontgetya™³²®© on November 10, 2010 at 3:11 PM | PERMALINK

"But this plan calls for dropping the top marginal rate to just 23%."

Is this a joke? Seriously?

How anything calling itself a deficit commission can endorse huge tax cuts is beyond belief.

Posted by: Area Man on November 10, 2010 at 3:14 PM | PERMALINK

Honest question: why does raising retirement age come up but raising the salary cap on social security contributions doesn't?

Is it true that raising the salary cap makes other social security problems go away?

Posted by: Ben on November 10, 2010 at 3:17 PM | PERMALINK

Is it true that raising the salary cap makes other social security problems go away?

Yes. SATSQ

Posted by: G.Kerby on November 10, 2010 at 3:18 PM | PERMALINK

@Ben, I think the proposal was also to raise the salary cap as well as retirement age.

@Area Man, I think they had proposed to cut a number of deductions, including most notably the mortgage interest deduction, which I suppose is how they try to justify the deep cuts in rates.

But yes, the fiscal commission was an utter waste of time. It seems like this country can't do anything unless there is a major crisis not merely looming but actually here right now.

Posted by: Ted on November 10, 2010 at 3:24 PM | PERMALINK

""But this plan calls for dropping the top marginal rate to just 23%."

Is this a joke? Seriously?

How anything calling itself a deficit commission can endorse huge tax cuts is beyond belief."

That's what I was wondering. More to the point, how is it even relevant? If the goal was to create solutions to the deficit, why would they even suggest something that doesn't aid that goal? Well, not only doesn't aid, but actively works against. Or was it a proposal to ride the Laffer Curve back to prosperity?

Posted by: Jurgan on November 10, 2010 at 3:31 PM | PERMALINK

maybe instead of putting lifelong politicians on such committees they should put regular working people who can attest to the value of some of these cuts they are proposing ...

Posted by: Tang on November 10, 2010 at 3:33 PM | PERMALINK

Obviously, the release date was a mistake. It was supposed to be April First. . .

Posted by: DAY on November 10, 2010 at 3:38 PM | PERMALINK

Waste of Time. This Catfood thing had a "thrown together" feel immediately and was headed by an idiot (Simpson) in an incredibly stupid move by Obama. Result: ZERO actionable ideas to seriously reduce the Deficit. SS shouldn't have even been part of the discussion. Where, one asks, is the recommendation to let the Bush Tax Cut for the Rich expire ????

Posted by: T2 on November 10, 2010 at 3:42 PM | PERMALINK

Speaking of wasteful government spending -- did these guys get paid? Can we get a refund?

Posted by: Rick on November 10, 2010 at 3:44 PM | PERMALINK

Wait, you mean the Big Scary Catfood Commission turned out to be a bust that couldn't even get its members to agree on recommendations?

Weird, I could have sworn that people on the left have been telling me for months that the End Was Near because the Catfood Commission was totally going to take away my (future) Social Security benefits and Obama was going to let them do it because shut up, that's why.

I never could get myself all worked up about it, and it's because I knew that this was pretty much what would end up happening -- the nuttier members would want extreme cuts, the more sane ones would refuse to vote for it, and no report would ever be issued at all. So much for the hysterics.

Posted by: Mnemosyne on November 10, 2010 at 3:47 PM | PERMALINK

These people we elect get their automatic raises, full family benefits yet expect people that work more than two days a week to take pay cuts and go without benefits. I think these elected freeloaders should walk the walk for a change. I mean, they been putting their money where their mouth is....as fast as corporations can shove it in there.

Posted by: Schtick on November 10, 2010 at 3:48 PM | PERMALINK

Next time, just for grins, can we have a commission headed by a liberal and a left-of-center moderate, who can propose things like returning to the tax rates of the Eisenhower era, funding infrastructure maintenance and improvements, extending Medicare to all, and modest cuts in the Defense budget?

I mean, as long as we're setting up commissions to generate crazy wish-lists...I'd like something a little more optimistic and grounded in reality.

Posted by: biggerbox on November 10, 2010 at 3:52 PM | PERMALINK

The Commission is yet another example of BHO's political ineptitude and lack of Progressive values 9or most any coherent values. Progessives need be another group vociferously opposing BHO.. both to get his attention (he compromises with whoever yells the loudest) and to replace him and other Blue Dog Dems who are either clueless on, or hopelessly afraid of, Keynesian economics and Clausewicz. [The Prussian is surely spinning rapidly in his grave re BHO's Marxian (Groucho)Afghan surge/withdraw strategy well-charaterized as "Hello, I must be going".]

Posted by: gdb on November 10, 2010 at 4:09 PM | PERMALINK

"But this plan calls for dropping the top marginal rate to just 23%."

Honest question (if there is anyone reading this who is wonky enough to have read the actual proposal and done the math)- given the mention of eliminating deductions and credits what would be the difference in EFFECTIVE tax rates?

Posted by: Bill K on November 10, 2010 at 4:10 PM | PERMALINK

Yep, you're right Ted. That's what I get for not reading the article:

"Increase the Social Security contribution ceiling: while people only pay Social Security taxes on the first $106,800 of their wages today, that's only about 86% of the total potentially taxable wages. The co-chairs suggest raising the ceiling to capture 90% of wages."

Posted by: Ben on November 10, 2010 at 4:13 PM | PERMALINK

As I've said before, the 23% top tax rate is simple GOP magical thinking. It's also the underwear gnomes' theory, writ large:

1) Cut taxes
2) ?
3) Profit!

-Z

Posted by: Zorro on November 10, 2010 at 4:15 PM | PERMALINK

"@Area Man, I think they had proposed to cut a number of deductions, including most notably the mortgage interest deduction, which I suppose is how they try to justify the deep cuts in rates."

This is true. And I think after they've scrapped these deductions, the overall amount of revenue collected goes up.

Still, it seems *very* hard to justify such a steep cut in the top tax bracket. The mortgage interest deduction mostly benefits the middle class. Maybe they're closing some other loopholes that will stick it to the rich, but those would have to be some pretty large loopholes to cover 16%.

Posted by: Area Man on November 10, 2010 at 4:34 PM | PERMALINK

"propose things like returning to the tax rates of the Eisenhower era, funding infrastructure maintenance and improvements, extending Medicare to all"

I'm with biggerbox.

I don't know why we have a commission when we already pay Congress to do this kind of thing (and a Congress full of millionaires, at that), but since we do, why can't we start off with the idea that taxes can go up, not just down?

I keep thinking of the causes of the French Revolution when large significantly wealthy portions of the nation, the Church and the Nobility, could not be taxed. The burden of supporting the state fell on the middle class and the poor. Why are we set on imitating the failed French ancien regime? (I'm not asserting that taxes were the only cause.)

Posted by: Seould on November 10, 2010 at 4:36 PM | PERMALINK

Why is it any time Republicans are asked to put forward budget-cutting proposals, step 1 is always "cut taxes on the rich"?

Posted by: Anthony Damiani on November 10, 2010 at 4:36 PM | PERMALINK

I'll give "Homer" Simpson credit for one thing - at least he's being out front in his wish to install an oligarchy. Can't say we weren't warned.

Seriously, that i where their priorities lie - enabling the rich (like themselves) to get richer and screw everyone else. Trading the mortgage interest tax credit for a 33% income tax cut for the highest bracket is the very definition of hubris. I've never been one to support the "2nd ammendment remedies", but if anything remotely close to this passes, I may have to reconsider.

Posted by: Stetson Kennedy on November 10, 2010 at 4:42 PM | PERMALINK

Even the liberal WashingtonMonthly approves of the commision.

"Some of my favorites...include the elimination of hundreds of thousands of federal workers, the elimination of subsidized student loans, new costs imposed on veterans for their health care, cutting schools on military bases, and new entrance fees at the Smithsonian."

Boy, lying by ellipses sure is easy.

Posted by: Facebook Sarah P on November 10, 2010 at 4:47 PM | PERMALINK

Why is one of the goals set up in the report "Lower Taxes"? On what planet do you start a report on closing the deficit by saying you have to simultaneously lower taxes? Maybe we could hold off on the goal of lowering taxes until AFTER the deficit is closed. And of course, there's no explanation/rationale provided for the goals. They're simply taken as a given.

Posted by: PhillyCooke on November 10, 2010 at 4:47 PM | PERMALINK

Where is the man who called the "National Commision on Fiscal Responsibility and Reform" and why is he not calling it's findings "hogwash" in person on television? It is hogwash, it needs to be called that loud and clear and excuse me Mr. President but, you are that man I just mentioned. We need leaders and we have gamblers instead.

Posted by: Trollop on November 10, 2010 at 4:57 PM | PERMALINK

I think this post is deceptive. As others have pointed out above, the cut in marginal tax rates comes with the elimination of deductions and credits. This may or may not make the overall tax code less progressive, but it's not clear from the information available. Similarly, the proposal calls for closing DOD schools, sending the kids to local schools, and reimbursing local school districts for the expense. Is that really so astounding? It sounds perfectly reasonable to me.

Posted by: cree on November 10, 2010 at 5:12 PM | PERMALINK

I mean, there's plenty of stuff to criticize in the report (like the student loan provisions) without distorting it.

Posted by: cree on November 10, 2010 at 5:13 PM | PERMALINK

My favorite part of their report is where they say we should CAP federal revenue at 21% of GDP. Yes, lower taxes AND limit the amount of money the government can collect. A sure way to reduce the deficit. Nimrods. I'm surprised there are no recommendation for increasing the number of fair TRADE agreeements?

Posted by: Gridlock on November 10, 2010 at 5:20 PM | PERMALINK

But some of the other provisions in the chairmen's plan are just head-shaking recommendations, pointing to things that simply won't happen. Some of my favorites -- and by "favorites," I mean ideas that I found astounding, not ideas I actually approve of -- include the elimination of hundreds of thousands of federal workers, the elimination of subsidized student loans, new costs imposed on veterans for their health care, cutting schools on military bases, and new entrance fees at the Smithsonian.

I would not be surprised to know that these ideas came from GOP committee member Paul Ryan - the GOP's current "blue-eyed boy" whom voters have just put in charge of the House Budget Committee. Ryan is a dangerous combination - his boyish looks and steady stream of squeaky patter, combined with a propensity for endless amounts of clueless busywork, make it hard for people to notice the guy hasn't the least idea what he's talking about (seemingly besides what he's read in Ayn Rand's books). A non-partisan institute analyzed Ryan's "Roadmap for America" and called it radical, dangerous and a plan for a massive transfer of wealth from the middle-class of this country to the rich. I don't even want to think about what Ryan is right now salivating over doing to this country.

Posted by: June on November 10, 2010 at 5:37 PM | PERMALINK

I'd be a lot more sympathetic about what is beyond Obama's control, if he effectively managed what was in his control.

Despite knowing full well that the regulators at Interior/MMA were fully captured by industry, Obama declared off-shore oil drilling "safe" and gave a green light to the drilling that lead to the Deepwater Horizon disaster.

Despite knowing that the GOP would obstruct any domestic initiatives to tackle climate change, Obama's administration failed to craft a meaningful international agreement at Copenhagen.

And now, despite the fact that Democrats could have unilaterally reduced the deficit, gotten the economy back on track, and proven the effectiveness of liberal policies, Obama picked a bunch of conservative ideologues who have produced a worthless "deficit reduction" plan that -- at best -- will be completely ignored.

Posted by: square1 on November 10, 2010 at 5:45 PM | PERMALINK

Ben,

Is it true that raising the salary cap makes other social security problems go away?

What “social security problems” ?

A) Social Security is NOT a cause of federal budget deficits. Once again, according to the independent non-partisan Congressional Budget Office, the overwhelming majority of the current federal budget deficits as well as the overwhelming majority of the future projected federal budget deficits are as a direct result of the massive decline in federal income tax revenue from the numerous rounds of tax cuts for the Rich & Corporate enacted by Chimpy Bush and the Republican Congressional Majority.

B) The actuaries say that Social Security is solvent through 2085, and they only do 75-year projections:

TRUST FUND RATIOS

Posted by: Joe Friday on November 10, 2010 at 6:47 PM | PERMALINK

What? No mention of my favorite tax cut - the one where the profits of US corporations' foreign subsidaries aren't taxed? Is there anything in the proposals that allows ME to own foreign stocks and not have to pay taxes on them? I didn't think so...
Where did the idea come from that individuals/families don't have to make a profit? Does that mean I can max out my credit card, stiff the bank that holds my mortgage and not worry about it because, after all, I don't need to have an income greater than my expenses?
And these people are considered "experts" on economic matters? By whom? And why?
Rant over, you may now continue with your regularly scheduled postings...

Posted by: Doug on November 10, 2010 at 7:12 PM | PERMALINK

DFA is on the case, go to this link: http://act.democracyforamerica.com/go/379?akid=355.1279693.pbH3OD&t=1

Posted by: neil b on November 10, 2010 at 8:58 PM | PERMALINK


1) Cut taxes
2) ?
3) Profit!

-Zorro @ 16:15

4) rinse, repeat
FIXED

Why can't this commission just say we're in unchartered waters and return their unspent budget? They KNOW anything they put forward will be tossed aside, especially if they put credible ideas on the table.

Posted by: Kevin (not the famous one) on November 10, 2010 at 9:38 PM | PERMALINK

Without an agreement on what the social goals are, there is no rationale for what should or should not be done wrt to expenditures or cuts. Just saying a budget needs to be balanced and the deficit reduced misses the points of why the existing messes exist and who wins or loses under various expenditure cuts or tax proposals. Because the assumptions underlying them are left unspoken, it is a dishonest report and utterly un-democratic.

Posted by: gone_west on November 10, 2010 at 10:05 PM | PERMALINK

I haven't heard any mention of whether or not Bowles' and Simpson's (Attention?) Deficit Reduction Commission addressed the budget-busting deficit-exploding Bush era tax cuts and their scheduled expiration at the end of next month after doing so much damage to our nation's fiscal house.

If all Bush era tax cuts expire, then our nation will have several trillion dollars over the next ten years to draw down the deficit and maybe even balance the budget. So any mention of this in their Deficit Reduction plan?

The specious argument that tax cuts create jobs is belied by the fact that Clinton era taxation rates generated over 21 million new jobs over his eight years in office, while budget-busting deficit-exploding Bush era tax cuts only generated a little over 3 million jobs over an eight year span.

Liars, liars, Republicans' pants on fire. Hopefully, they've all paid their "privatized" fire department response fee, otherwise they're all going up in smoke...and taking everyone else with them.

Posted by: The Oracle on November 11, 2010 at 4:07 AM | PERMALINK

What is going on, I could not believe my eyes, looking at the TV last night, the commission wants to give more to the people who have been stealing our money over the last 10 years! Now we have been impoverished and Wall Street & corps have broken the country, we must give them more!!!!
My blood pressure is on an upward swing especially when I see a picture of a supreme court judge fundraising with Bachman on DU.

Posted by: js on November 11, 2010 at 7:49 AM | PERMALINK

My "favorite" is increasing the amounts that *active duty* military must contribute to their own health care costs.

Most active duty military are paid a poverty wage. Many, as we know, qualify for food stamps.

Unbelievable. (Well, I can believe it of Simpson, but from Bowles it's pretty shocking, even if he is a *conservative* Dem.)

Posted by: Nancy Irving on November 12, 2010 at 2:39 AM | PERMALINK




 

 

Read Jonathan Rowe remembrance and articles
Email Newsletter icon, E-mail Newsletter icon, Email List icon, E-mail List icon Sign up for Free News & Updates

Advertise in WM



buy from Amazon and
support the Monthly