Cross-posted at Winning Progressive

In February, President Obama created by Executive Order the Commission on Fiscal Responsibility and Reform, which is charged with designing a plan to achieve long term fiscal sustainability for our country.  While this goal is important, the steps we take to achieve it say a lot about our priorities as a country.  

Unfortunately, the draft proposal released on Wednesday by the two Co-Chairs of the Commission suggests that their priorities are way out of line with what is good for our country.   In particular, the proposal seeks to reduce the deficit on the backs of the middle and working classes and at the expense of Medicare and Social Security, while at the same time providing further tax cuts to the rich.  Such an approach should be roundly rejected as unacceptable.

Some of the most objectionable provisions in the Co-Chairs’ proposal include:

* Lower Taxes For the Rich: The Co-Chairs propose to reduce tax rates on the wealthiest Americans, who have made out like bandits for the past thirty years, from 39.6% (assuming the Bush tax cuts expire) to 23%.  Corporate tax rates would also be reduced to 23%.  Cutting already low tax rates on the highest income brackets is not a good way to reduce the budget deficit and simply increases the cuts in government programs that would be needed to achieve budget balance.  

While the Commission claims to offset those cuts with elimination of various credits and deductions, it is very hard to believe that some of the deductions (such as the mortgage deduction) will be eliminated. And even if those deductions and credits are eliminated, much of the burden of such changes (such as elimination of the Earned Income Tax Credit) would fall hardest on the working class and poor, not the rich folks who would be getting the biggest reduction in their tax rates.

* Cutting Future Social Security Benefits: The Co-Chairs propose to index Social Security benefits to a lower inflation rate and to raise the retirement age, both of which would cut benefits.  Such major changes are not needed to preserve the long term solvency of Social Security, however, especially if we extend the Social Security tax to all income, rather than just on the current bottom 85% of wages, or the 90% of wages proposed by the Co-Chairs.

* Cuts in Medicare and Medicaid: The Co-Chairs propose to cap Medicare and Medicaid expenses, and to increase co-pays for Medicaid patients.  Such cuts are highly problematic, especially in the absence of any serious effort to cut the actual costs of health care.

* Weakening Federal Agencies: The Co-Chairs proposed across the board federal employee pay freezes, combined with 10% reductions in the federal workforce.  These proposals would further weaken the effectiveness of our government and make it even more reliant on private contractors.

* Cutting Military and Veterans’ Health Benefits: The Co-Chairs propose to cut military and veterans’ health benefits by increasing co-pays and deductibles.  Such proposals are unjustified, especially after we have asked our brave troops to fight wars in Iraq and Afghanistan for the past eight plus years.

It is important to note that the Co-Chairs’ proposal does include some worthwhile recommendations.  For example, much of the $200 billion in cuts in federal programs, including $100 billion in defense cuts, seem appropriate.  However, the core of the proposal is unacceptable, as it undermines fundamental programs like Social Security and Medicare, impacts the middle and working classes the most, and provides further tax cuts to the wealthy elite.

There are far more sensible ways to achieve long term fiscal discipline in our country, including increasing the contribution that the wealthy are required to pay, much larger cuts in unnecessary defense spending, ending farming and other corporate subsidies, and bringing health care costs under control.  Unfortunately, this plan does not do any of those things and, instead, seeks to balance the budget on the backs of middle and working class Americans.

While the Co-Chairs’ proposal is referred to as a draft, and the final plan from the Commission as a whole will not be finalized until December 1, the biggest concern is that this draft proposal could serve as a baseline for a “compromise” that will still have most of the problematic aspects of this proposal.  In addition, the Commission’s final proposal will serve as a roadmap to Republicans in Congress, who have long used disingenuous concerns about fiscal responsibility as cover for their goal of weakening and ten eliminating Social Security and Medicare.

Therefore, it is critical that we nip this draft proposal in the bud by contacting the Democratic members of the Commission and urge them to follow the lead of Speaker Pelosi and other progressives and declare this proposal unacceptable.  In addition, call the White House –  202-456-1111 – and your member of Congress and urge them to do the same thing.

Max Baucus (202) 224-2651

(406) 657-6790           (406) 586-6104           (406) 782-8700          (406) 365-7002                       (406) 761-1574             (406) 449-5480            (406) 756-1150           (406) 329-3123

Rep. Xavier Becerra (D-CA 31) – (202) 225-6235  (213) 483-1425

Sen. Kent Conrad (D-ND) – (202) 224-2043

(701) 852-0703           (701) 775-9601          (701) 258-4648           (701) 232-8030

Sen. Richard Durbin (D-IL) – (202) 224-2152 –

(312) 353-4952           (217) 492-4062           (618) 351-1122

Alice Rivlin, Senior Fellow, Brookings Institute – (202) 797-6121

Rep. Jan Schakowsky (D-IL 9) – (202) 225-2111 – (847) 328-3409 – (773) 506-7100

Rep. John Spratt (D-SC 5) – (202) 225-5501

(803)327-1114            (803) 773-3362           (843) 393-3998

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