Annie
Diamond Member
- Nov 22, 2003
- 50,848
- 4,828
- 1,790
Not going to make anyone happy department:
Fasten your Seat Belts! An Even Tougher Deficit Plan - TheFiscalTimes.com
Fasten your Seat Belts! An Even Tougher Deficit Plan - TheFiscalTimes.com
News
Fasten your Seat Belts! An Even Tougher Deficit Plan
By ANDREW L. YARROW, The Fiscal Times on Nov 17, 2010
Former Congressional Budget Director Alice Rivlin and former Senate Budget Committee Chairman Pete V. Domenici, R-N.M., have been combating public debt for decades, and have few peers as federal budget mavens. Today, the Bipartisan Policy Center (BPC) Debt Reduction Task Force they co-chair is releasing some of the most far-reaching proposals yet for sharply reducing the federal debt, beginning in 2020.
The task force report outlines measures to blow up the income tax and start over, slash projected Medicare and Medicaid costs by $756 billion over the coming decade, impose a medium-term freeze on defense and domestic discretionary spending, introduce a host of solvency-creating Social Security reforms, and impose a national debt reduction sales tax, Rivlin told The Fiscal Times during a recent interview in her Brookings Institution office.
The proposed national sales tax known as a Value Added Tax (VAT) will be highly controversial because it would be imposed on top of existing state sales taxes potentially a blow to the economic recovery. And the proposal for Medicare would dramatically alter the way the national health insurance program for the elderly is financed and operated.
Debt is a big problem, which is why ours is a bold plan, said Rivlin, who also serves on President Obamas bipartisan deficit commission, which is due to issue its own report in two weeks. Rivlin and Domenici believe the country is facing a serious fiscal crisis with the annual budget deficit well in excess of $1 trillion and the national debt threatening to bump up against a $14.3 trillion debt ceiling by early next year.
This crisis is an opportunity to do some significant reforms, Rivlin said. And its important to demonstrate that a bunch of Republicans and Democrats can come together on something the group believes is viable, even if not everyone agrees with all the pieces.
Last week, the chairmen of the Presidents commission, Erskine Bowles, former chief of staff to President Clinton, and former Republican Sen. Alan Simpson, R-Wyoming, publicly floated recommendations to reduce deficits by $3.8 trillion over the next decade and spark discussion among commission members. These ideas, which overlap with some being presented today by the BPC group, have won some kudos for the boldness but already sparked fierce criticism across the political spectrum.
If anything, the Rivlin-Domenici task force recommendations are even bolder. Overall, the plan would cut the deficit by $5.8 trillion by 2020. The plan includes nine components that address virtually all aspects of federal spending and taxes in ways intended to establish long-term fiscal responsibility, spread cuts among entitlement and discretionary spending, radically revamp Americas tax system, and help stimulate economic growth. The pieces of this plan, like any budget plan, are ones that would not have much chance if voted on by themselves, but Im very excited about the broader package, Rivlin said. (The task force is partly funded by the Peter G. Peterson Foundation. Peter Peterson also finances The Fiscal Times.)...