Debt commission produces plan, schedules vote for Friday
Tuesday, November 30, 2010; 5:49 PM
A bipartisan presidential commission has made changes to a plan to reduce America's deficits and rein in the national debt, and its members will vote on the "final product" Friday, the panel's co-chairmen announced Tuesday.
The co-chairmen, former senator Alan K. Simpson (R-Wyo.) and former Clinton chief of staff Erskine Bowles, told a news conference that commission members would meet Wednesday to discuss the plan, which aims to cut the federal deficit in half by 2015 and stabilize the nation's soaring debt.
Simpson and Bowles spoke after the National Commission on Fiscal Responsibility and Reform, as the panel is formally known, held a closed-door meeting to discuss changes to a draft plan that the co-chairmen released three weeks ago.
"America, you have a serious problem," Simpson said in opening remarks at the news conference. "And time is short to address it."
He said a main feature of the plan is that it eliminates what he called "tax earmarks," essentially expenditures in the tax code that amount to $1.1 trillion a year. "Tax earmarks are spending by another name, and they just drain America," Simpson said, adding that it is now "sober-up time" for the companies that have benefited from them over the years.
Bowles said the commission's goal was to "start an adult conversation here in Washington about the dangers of this debt and the deficits we are running." He said the final plan, scheduled to be released later Tuesday, would not be a "watered-down version" of the draft issued by the co-chairmen. But he and Simpson declined to specify the changes pending the official release of the plan.
Simpson predicted that groups from "the far left and far right" would quickly attack the plan.
"They're going to rip this thing to shreds, and do it with zeal," the former senator said. But, he added, "we're not balancing the books of America on the backs of poor Social Security recipients. I mean, that's babble."
Simpson told reporters, "We will listen now in the next few days to the same old crap I've been dealing with all my public life: emotion, fear, guilt and racism." He vowed to respond with facts, "which really irritates 'em."
The commission had planned to hold two days of public hearings this week before voting on a final report Wednesday and sending it to President Obama. But the panel announced that it would continue private deliberations instead and postpone the vote.
Support from 14 of the 18 commission members is needed to issue a formal recommendation, which then would be forwarded to Congress for its consideration.
The draft released by Simpson and Bowles on Nov. 10 called for "shared sacrifice" to reduce America's "crushing debt burden." It recommended cutting increases in Social Security benefits, eliminating $100 billion a year in tax breaks, reducing defense spending and farm subsidies, reforming the tax code and imposing tough caps on discretionary spending.
The plan would achieve nearly $4 trillion in deficit reduction through 2020 and reduce the deficit to 2.2 percent of gross domestic product by 2015, the draft said. It would reduce tax rates and cut "backdoor spending in the tax code." Among the tax breaks slated for elimination in the plan is the ability to deduct the interest paid on mortgages.
The plan would also cap revenue at or below 21 percent of GDP and eventually reduce spending to the same proportion. It would "stabilize" the national debt, now nearly $13.8 trillion, by 2014 and reduce it to 60 percent of GDP by 2024 and 40 percent by 2037, the draft said.
"America cannot be great if we go broke," the document said. "We must stabilize then reduce the national debt, or we could spend $1 trillion a year in interest alone by 2020."
The plan promptly came under criticism from both Republicans and Democrats. House Speaker Nancy Pelosi (D-Calif.) called it "simply unacceptable," suggesting that it erodes the "bedrock promises of Social Security and Medicare." Other Democrats objected to the spending cuts and called for greater emphasis on increasing revenue.
Several Republicans on the commission have advocated more spending cuts and other changes to the tax code.
The bipartisan commission, created by Obama in February, is charged with proposing recommendations to balance the federal budget , excluding interest payments on the debt, by 2015 as part of a plan for long-term "fiscal sustainability." Its members include 12 lawmakers, half of them Democrats and half Republicans.