$4 Trillion Cut from Budget’s Sacred Cows in New Plan
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The Fiscal Times
November 10, 2010

By releasing a bold and far-ranging plan on Wednesday for eliminating nearly $4 trillion of deficit spending in the coming decade, the co-chairmen of the president’s bipartisan fiscal commission appeared to be trying to jump-start the deliberations of a politically divided panel and rally support on Capitol Hill after an election last week in which voters expressed outrage over excessive government spending and debt.

The massive savings proposals offered by Democrat Erskine Bowles and Republican Alan Simpson touched on virtually every sacred cow in the federal budget, from Social Security and Medicare for the elderly, to mortgage interest deductions and other expensive tax breaks long enjoyed by the middle class, to defense contracting and military operations, to the operation of virtually every governmental department and agency in Washington.

The 75 pages of ambitious plans and strategies, posted on the commission’s website with little fanfare, would trim the annual cost of living for Social Security recipients, gradually boost the retirement age to 69, clamp a three-year freeze on the pay of most federal workers, and impose a 10 percent cut in the federal work force. The Bowles-Simpson plan would also increase the gasoline tax by 15 cents a gallon to fund transportation projects, eliminate the perennial shortfall in Medicare payments to physicians by imposing cost-control measures – and even charge an admission fee at Smithsonian Institution museums in Washington and raise fees at national parks.

“We have a patriotic duty to come together on a plan that will make America better off tomorrow than it is today,” Bowles and Simpson said in their document. “America cannot be great if we go broke. Our economy will not grow and our country will not be able to compete without a plan to get this crushing debt burden off our back.” None of the proposed changes would take effect before 2012 to avoid undermining the slow economic recovery.

Richard Trumka declared that Bowles and Simpson
“just told working Americans to ‘Drop Dead.’”

 

But the strategy of abruptly releasing the proposals with little warning may have boomeranged, as House Speaker Nancy Pelosi, D-Calif., dismissed the plan as “simply unacceptable,” and signaled that it was unlikely she would be willing to bring commission recommendations up for a vote in the House before the end of the year.

“Any final proposal from the Commission should do what is right for our children’s and grandchildren’s economic security, as well as for our nation’s fiscal security, and it must do what is right for our seniors, who are counting on the bedrock promises of Social Security and Medicare,” said Pelosi, who is in charge of the House until Republicans take control in January. “And it must strengthen America’s middle-class families – under siege for the last decade, and unable to withstand further encroachment on their economic security.”

Pelosi and Senate Majority Leader Harry Reid, D-Nev., had promised Obama to bring to a vote late this year any recommendations emerging from the commission supported by at least 14 of the 18 members. The Bowles-Simpson proposals have been a part of the wish list of budget reformers and deficit hawks for years, but many of them are politically unfeasible and are anathema to the views of senior citizens’ groups, business and labor organizations, defense contractors, government employees, colleges and students, and the health care industry – many of whom issued strong denunciations Wednesday.

AFL-CIO President Richard Trumka declared that Bowles and Simpson “just told working Americans to ‘Drop Dead,’” adding, “Especially in these tough economic times, it is unconscionable to be proposing cuts to the critical economic lifelines for working people, Social Security and Medicare.”

“We’ll both be in a witness protection program
when this is all over, so look us up,” Simpson said.

 

Barbara B. Kennelly, president of the National Committee to Preserve Social Security & Medicare, complained that the proposal “relies far too heavily on benefit cuts which will hurt millions of Americans,” and that “lowering COLAs, raising the retirement age, and making benefit cuts in Social Security have nothing to do with solving this fiscal crisis.” Bowles and Simpson insisted that the Social Security savings would be dedicated to the solvency of the retirement program, and not reducing the deficits in the overall federal budget.

“We’ll both be in a witness protection program when this is all over, so look us up,” Simpson, a former Wyoming Republican senator, joked with reporters Wednesday. “We’re not asking anybody to vote for this plan – this is a starting point,” added Bowles, a former White House chief of staff during the Clinton administration.

Bowles and Simpson worked quietly with commission staffers during the past month while lawmakers on the panel were back in their home states vigorously campaigning for reelection. A committee source said that the resulting document was originally meant to be circulated among the members when they returned to Washington, but was not intended for public consumption. But at the last moment, Bowles and Simpson decided to make their plan public in order to “get ahead of the message” because “it was going to get leaked anyway,” the source said.

Washington Editor and D.C. Bureau Chief Eric Pianin is a veteran journalist who has covered the federal government, congressional budget and tax issues, and national politics. He spent over 25 years at The Washington Post.