More Deficit Commission Reports, When We Need a Growth Commission Report

[Better Believe It]

More Deficit Commission Reports, When We Need a Growth Commission Report
By: David Dayen
November 17, 2010

We definitely needed another greybeard panel to tell us all to sacrifice to “get our fiscal house in order.” And that’s what we got today, with the Domenici-Rivlin Bipartisan Policy Center report on debt reduction. Pete Domenici is the former Republican Senator from New Mexico who at the end liked to walk around Congress in his pajamas; Alice Rivlin is the deficit scold Democrat who’s a member of the Catfood Commission.

Their report is basically similar to the Bowles-Simpson report. It includes tax reform of the “lower the rate, broaden the base” variety, with the innovation being the addition of a 6.5% “debt-reduction sales tax” (probably a nice way of saying VAT, a regressive sales tax). They “strengthen” Social Security with three of the four recommendations from Bowles-Simpson, jettisoning the increase in the retirement age while using progressive price indexing, changing the calculation of COLA and increasing the payroll tax cap to 90% of compensation. They “reform Medicare and Medicaid” with a lot of hand waving, a tax on soda, eliminating the employer deduction for health care (which would lead millions of companies to ditch their health care, no?) and not much else. They would freeze discretionary and defense spending and limit future growth. And they would basically keep the cost of government racheted down, regardless of demand for services, through a variety of means.

All these deficit commissions and deficit reports, positioned to drop at the same time, are meant to give the indication that America needs to cut its deficit right now, despite 15 million people out of work. Never mind if the plan constitutes a transfer of wealth upward to the rich, or if it tilts in favor of cuts to services people need instead of tax fairness that the most fortunate of us can afford. Even Jan Schakowsky’s progressive plan concerns me, because it plays on this turf where the only responsible measure is to cut the deficit, which is the exact opposite of what we should be doing right now.

You can see what Bowles and Simpson are trying to pull off. Their report was attacked badly. But if they can get a vote on it or something like it with a Republican House and a more Republican Senate, they can convert it into something that John Boehner can love, at that point garnering enough support from Republicans to pass at least one house. Then Democrats in the Senate can be browbeaten into acceptance on the grounds of having to be “serious” about the deficit. And you can bet that nothing like Domenici-Rivlin’s payroll tax holiday will factor into this scenario.

That’s why the best move is not to play, and to hope the commission collapses under its own weight.

[dkf]

1. You are so right that no one is talking about how to grow the economy.

I don't know how we are supposed to compete with the Chinese who can simply strategize and implement.

[slipslidingaway]

2. knr nt

[slipslidingaway]

3. Links ...

http://news.firedoglake.com/2010/11/17/more-deficit-commission-reports-when-we-need-a-growth-commission-report/

http://bipartisanpolicy.org/news/press-releases/2010/11/bipartisan-policy-center-task-force-unveils-bold-comprehensive-plan-solv

"A bipartisan task force of former top federal officials and other leading Americans unveiled a bold, comprehensive plan to solve the problem of soaring federal deficits and debt while dramatically simplifying taxes for businesses and individuals, strengthening Social Security, and creating up to 7 million new jobs.

The plan, entitled, Restoring America’s Future, from the Bipartisan Policy Center’s Debt Reduction Task Force, co-chaired by former Senate Budget Committee Chairman Pete Domenici and former White House Budget Director Alice Rivlin, would reduce the debt to below 60 percent of the economy, reduce annual deficits to manageable levels, and balance the “primary budget” (everything other than interest payments) by 2014. By doing so, the plan would resolve a crisis that, if not addressed, will raise the risks of an economic crisis and weaken the nation over the long term.

“The two of us share strong beliefs that America must learn to live within its means, that the current budget path endangers the future of our country, and that bipartisan action is urgently needed,” Domenici and Rivlin wrote in “An Open Letter to the American People” that accompanies the plan...

...Specifically, the plan would rein in federal health care spending by reforming Medicare and Medicaid; ensure that Social Security can pay benefits for the next 75 years; find savings in other entitlement programs; freeze both defense and non-defense discretionary spending for several years; establish a 6.5 percent Debt Reduction Sales Tax; and enforce all of these savings through strict budget rules..."

[chill_wind]

4. K & R. He drives good points home. n/t

[unkachuck]

5. all these corporatists....

....are trying hard to convince us to take it up the ass for their corporate buddies and their fuck-up schemes....

....it's not going to work....if we're short of cash, we need to pursue the corporations and their minions that have been stealing us blind for decades....