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Deficit Plan Released by Obama Commission, Few Expect Consensus

Jenny Chen |
December 1, 2010 | 1:44 p.m. PST

Staff Reporter


U.S. Capitol (Creative Commons)
U.S. Capitol (Creative Commons)
The leaders of President Barack Obama’s debt commission released the panel’s revised report on Wednesday, hoping to generate enough support from two much divided political parties to pass an official recommendation to Congress on Friday.

Changes were made to the original plan released Nov. 10 by the commission’s co-chairmen, former Republican Senator Alan Simpson and former Clinton administration chief of staff Erskine Bowles. 

The National Commission on Fiscal Responsibility and Reform will discuss these new recommendations on Wednesday and vote on Friday. The vote was pushed back two days in order to give the 18-person commission time to review the plan’s changes. 

Bowles and Simpson must get 14 of the members to support the plan, which seeks to cut the nation’s deficit by nearly $4 trillion by 2020

The co-chairmen said their intent was not to create a concrete plan, but open up discussion. 

“We’re not interested in 14 votes for whitewash. The problem is just too plain big and too important for our country,” Bowles said Wednesday morning. 

Disagreement between the Democrats and Republicans has afflicted the panel, making it difficult to foresee a bipartisan consensus prior to Friday’s vote. Experts do not expect the commission to generate a supermajority vote in favor of the plan. 

Entitled, “The Moment of Truth,” the report warns that America needs to put aside its differences to put forth a new plan “because our nation would certainly be lost without one.” 

“Our challenge is clear and inescapable: America cannot be great if we are broke. Our businesses will not be able to grow and create jobs, and our workers will not be able to compete successfully for the jobs of the future without a plan to get this crushing debt burden off our backs.” 

The commission was put together by Obama in February.  It originally had a Dec. 1 deadline to offer a proposal. 

The report released Wednesday proposes a six-part plan that will enact discretionary spending caps in Congress, change the tax system, form a new long-term health care program, and reform social security. 

Specifics include reducing tax rates, gradually increasing the age to receive full retirement benefits, creating a three year pay freeze for federal workers, cutting 200,000 federal jobs, and stabilizing debt by 2014. 

Currently, only seven members of the commission have said they would vote “Yes” on Friday. While the co-chairmen are not expected to generate support to pass the plan along to Congress, the report is expected to provide a framework for future debate.  

Bowles said Wednesday morning there were many things not to like about the plan.  “There are plenty of reasons not to vote for this plan,” he said, noting that “the problems are real, the solutions are painful and there are no easy choices.” 

UCLA Professor Daniel J. Mitchell wrote on UCLA Today that the report “is useful because it illustrates the kinds of cuts that would have to be made, and the kind of tax system that might be utilized, to reach the co-chairs’ particular spending, deficit and debt targets.” 

Retiring Senator Judd Gregg (R-NH), in favor of the plan, concurred in a statement, “It represents a step forward that we urgently need.” 

Others remained far less confident, including Stan Collender, former congressional budget aide and managing director of Qorvis Communications in Washington. “The mantra for next year is grid, stalemate, and shutdown,” he said. 

Mitchell, too, criticized the report for offering a single set of options preferred by the co-chairs rather than “a menu of alternative targets.” 

A lack of compromise by the commission stems from issues that Republicans and Democrats seem unable to agree on. Republicans are fighting against tax increases while Democrats are opposing decreases in health care and social security benefits. 

Reach Reporter Jenny Chen here.

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