A top House Democrat on Monday urged President Obama’s bipartisan commission addressing the mounting budget deficit to devise a balanced package of tax increases and entitlement spending reductions that might include raising the retirement age and means testing Social Security and Medicare benefits.
House Majority Leader Steny Hoyer of Maryland said that changes in the federal retirement and health care programs for the elderly should take into account the fact that Americans are living longer. Another possibility, he said, would be to peg Social Security and Medicare benefits to income, so that higher income seniors would receive fewer benefits than lower income beneficiaries as part of an effort to strengthen the safety net for low-income Americans.
"It seems to me that the only solution that can win the support of both parties is a balanced approach: one that cuts some spending and raises some revenue while avoiding extremes in either direction," Hoyer said. "A balanced approach would spread the effects of change across American society, rather than concentrating them on seniors."
Democrats often call for higher taxes on the wealthy to reduce the deficit but are reticent about recommending cuts to social programs. Hoyer, the second ranking House Democrat and a fiscal moderate, outlined options for both in a speech at the Brookings Institution.
Obama signed an executive order Feb. 18 to create the National Commission on Fiscal Responsibility and Reform, with instructions to provide Congress with a series of recommendations for reducing the deficit and slowing the rate of growth of major programs providing retirement benefits, health care and other social services by Dec. 1, after the midterm election. House and Senate Democratic leaders have promised to present the proposals to Congress for an up-or-down vote before adjourning for the year.
Many Republicans believe the commission is designed to provide political cover for tax increases. Meanwhile, liberal Democrats caution that an abrupt shift toward deficit reduction—and away from economic stimulus—would set back the economic recovery. They say changes to safety-net programs like those Hoyer suggests would inevitably hurt low-income Americans most.
After the speech, Hoyer declined to cite specific tax measures the commission ought to look at, though he indicated that a European-style value-added or VAT tax might be too broad for the purposes of the commission.
But Hoyer said Obama was correct in refusing to take any options off the commission’s table, including taxes. "No one likes raising revenue, and understandably so," he said. " But if you’re going to buy, you need to pay."
The panel would include 10 Democrats and eight Republicans, including six chosen by GOP congressional leaders. For his part, Hoyer said he wants Republicans to participate "without preconditions, ready to contribute their ideas and not just their criticism from the sideline."
Republican leaders have not made their picks. House Minority Leader John Boehner of Ohio has instead called on Obama to take more immediate action: Sending Congress legislation to rescind existing spending according to proposals in his 2011 budget. Those plans would reclaim about $10 billion.
