Republicans Wary of a Tax Trap

Republicans Wary of a Tax Trap

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A commission may be useful where regular-order legislation has failed to seriously address long-term deficits. But Republican concerns about being used to sign off on large tax increases are not without merit. After all, the long-term deficits are driven almost exclusively by rising spending, not declining revenues. Even if all tax cuts are extended, revenues would still remain close to the historical average of 18 percent of GDP indefinitely. Yet long-term deficits will result from Social Security, Medicare, and Medicaid spending rising by 10 percent of GDP over the next few decades – with the net interest also rising as a result. Thus, even a commission that splits the difference between tax hikes and entitlement restraints would leave the federal government with substantially higher spending and tax levels than ever before.

Furthermore, current reports suggest the deficit commission would work in secret (no public hearings, nothing televised), produce its recommendations after the election, and require a vote from a lame duck Congress. This is the opposite of transparency and accountability, and the American people are right to be skeptical of a commission that would work in some back room, and produce a major set of reforms that would be addressed by a lame duck Congress.

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Brian Riedl is a senior policy analyst and Grover Hermann Fellow in Federal Budgetary Affairs at The Heritage Foundation