Our guest blogger is Michael Linden, Associate Director for Tax and Budget Policy at the Center for American Progress Action Fund.Earlier today, the co-chairmen of President Obama’s fiscal commission released their draft proposal (a.k.a. chairmen’s mark) to reduce the deficit. This is not the final report of the fiscal commission, but it is likely going to be the starting point for the remainder of the panel’s discussions. There’s a lot in there, but let’s highlight three good ideas and three bad ideas. Here are the good ideas:
— Defense Cuts: The chairmen’s mark includes about $100 billion in what they call “illustrative” cuts to military spending. These cuts would be used to meet an overall discretionary target of about $174 billon in savings compared to the president’s budget. Their suggested cuts are similar to the Center for American Progress’ own suggestions, and it’s nice to see them take seriously the fact that defense cuts have to be a part of the solution.
— Agriculture Subsidy Reductions: The proposal includes about $3 billion a year in cuts to agriculture subsidies. This is a big step in the right direction. Experts from across the political spectrum have repeatedly called for these subsidies to be substantially reduced. Even President Bush thought so. If we’re going to cut wasteful or unnecessary spending, this is the place to start.
— Revenue: The chairmen’s mark has revenue going to 19.3 percent of GDP in 2015 and then eventually up to 21 percent of GDP. Again, this is an important step in the right direction. The president’s budget plan calls for 19 percent of GDP in 2015, and that assumes the expiration of the Bush tax cuts on the richest two percent, along with a host of other revenue raisers. That the chairmen’s proposal results in slightly higher revenues for 2015 is, at the least, an admission that revenue must be part of the solution. I think they’re still a little low on the revenue side of things, but it’s a start.
As for the bad ones:
— Draconian Cuts To Services And Programs: The plan seems to suggest about one dollar in non-defense discretionary cuts for every dollar in defense cuts. I can understand the political logic of this, but substantively it’s a really bad idea. Non-defense discretionary dollars go to pay for some very crucial things like veteran’s health care, education, science and health research, consumer product, food and drug safety, and law enforcement. $100 billion in cuts represents a greater than 15 percent reduction on all these things. Unlike the defense cuts – which could be implemented without harming national security – this level of reduction to such a wide array of public services would really hurt.
— Raising The Social Security Retirement Age: This is a popular idea in certain Washington circles, but as ThinkProgress’ Matthew Yglesias says, it is “basically the very most regressive way to reduce entitlement spending.” There are better ways to bring Social Security into 75 year actuarial balance than asking people to work longer.
— Revenue: It’s good that the chairmen recognize the need for more revenue. It’s bad that they don’t really tell us how they plan to get it. Instead they say they’ll get $80 billion from tax reform, and then offer three visions of what that reform might look like. Now this is just their initial proposal, and I’m sure it’ll get fleshed out more in the coming weeks, but for now, while their spending cuts are pretty specific, their revenue plan is frustratingly muddied.
Cross-posted at The Wonk Room.