Monday, July 18, 2011

Report of the National Commission on Fiscal Responsibility and Reform

Regarding America's budget and debt problems, there is no corrective action which will not inflict extreme pain on the aged, the disabled, AND the wealthy.

Barely six months age, the National Commission on Fiscal Responsibility and Reform issued their report.  This is the bipartisan Commission created by President Obama to review and make suggestions concerning the fiscal problems of the Country.

President Obama -- like many others -- saw the necessity of addressing our very real fiscal problems.  The political problem?  While many of the recommendations make sense, they require that both sides of the aisle to make concessions.  Neither would . . . and the results of the Commission's work mostly remain on the shelf.

It was (and still is) obvious that such careful study was necessary.  It's also obvious that Conservative Republicans did not originate the ideas that the debt was a problem.  And, they are not the ones who are trying to deal with our Nation's fiscal problems in a responsible way.

All things considered, now seems like a good time to take another look at the Commission report.  Specifically, the Commission proposed actions to balance the budget by 2015, excluding interest payments on the debt, and made recommendations to improve the long-run fiscal outlook -- including to slow the growth of entitlement spending and the gap between the projected revenues and expenditures of the Federal Government.

All of this sounds very much like the discussions surrounding the current talks about the debt ceiling -- except that the Commission dealt with the issues in a generally bipartisan manner until it was time for the votes to be counted.

In the end, no one was happy either with the necessity of cuts or with the final recommendations, but the bipartisan Commission did come to some generally reasonable recommendations in the larger context.

Unfortunately, in a sign of the times and a harbinger of things to come, all of its own members could not give the Commission's final report their full endorsement.  In the end -- a not-so-bipartisan commission.

Today, the debt limit stalemate is completely political and caused by the unyielding demands of ideologically frozen Conservative Republicans.  Actually, Conservative Republicans don't like the debt any less than anyone else; they just use it as their latest smoke screen to hide their real agenda -- to negate decades of progress and dismantle Medicare and Social Security.

What were the expected results from the Commission?  Well, here's the result in a simple graph -- a significant reduction from the then-current law:

 Unfortunately, this was BEFORE the huge tax cuts for the wealthy were extended.  So today, in order to get to this graph, we'd first have to take back all of those tax breaks for the super-rich.

Never the less, even though no one cared for them at the time (or even now), it might be instructive to take a look at the six major components of the plan, just to remind us once again about how seriously difficult this all is:

     1) Discretionary Spending Cuts via significant cuts in both security and non-security spending by cutting low-priority programs and streamlining government operations.

     2) Comprehensive Tax Reform via broadening the tax base, simplifying the tax code, and capping revenue to avoid excessive taxation.

     3) Health Care Cost Containment via replacing phantom savings with real, common-sense reforms to physician payments, cost-sharing, malpractice law, prescription drug costs, government-subsidized medical education, and other sources.

     4) Mandatory Savings via cutting agriculture subsidies, modernizing the military and civil service retirement systems, reforming student loan programs, and putting the Pension Benefit Guarantee Corporation on a sustainable path.

     5) Social Security Reforms to Ensure Long-Term Solvency and Reduce Poverty via ensuring sustainable solvency for the next 75 years while reducing poverty among seniors.  "Reform Social Security for its own sake, and not for deficit reduction."

     6) Process Changes: Reform the budget process to ensure the debt remains on a stable path, spending stays under control, inflation is measured accurately, and taxpayer dollars go where they belong.

Something to consider:  If we keep studying and pondering and then keep reaching the same conclusions again and again, ought we not accept at least some of the recommendations?  Ought we not accept reality and swallow the bitter pill rather than deny the illness?  The truth is that there is no corrective action which is not painful to the aged, the disabled, and the wealthy.

You can learn much more at:  National Commission on Fiscal Responsibility and Reform.  You can read their final report -- the aptly named "The Moment of Truth" (December 1, 2010).


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