The deficit reduction committee, created by President Obama a few months back to kick the can of his irresponsible overspending down the road a few decades, is out with its trial balloon recommendations for reducing the federal deficit. According to the Wall Street Journal, its ideas include:
For businesses, it would lower the corporate tax rate but remove a number of deductions currently available. It would make permanent the research-and-development tax credit.
Federal subsidies to agribusinesses would begin to be slashed by $3 billion a year.
On Social Security, it would gradually increase the retirement age when people can start receiving benefits to 68 at around 2050 and to 69 by 2075.
It would combine a cut in benefits with an increase in taxes levied on wealthier seniors’ benefits.
The savings would be phased in over time and include a freeze on salaries and bonuses paid to federal employees for three years, at a savings of $15.1 billion by 2015.
It would propose cutting the federal work force by 10% for a further savings of $13.2 billion by 2015.
It would seek to rein in federal spending on health care, both by introducing further proposed changes, including reform of tort law, and by seeking to slow the growth of the Medicare program.
All of that, especially cutting the corporate tax rate and tort reform, makes sense. Tort reform alone could do quite a bit to reduce medical costs, which should in turn reduce health insurance premium costs, which would help families and individuals up and down the economic ladder without forcing anyone to buy anything or increasing government control over anything, as ObamaCare does. I’m fine with raising the retirement age and cutting Social Security benefits. Overall we need to reduce liabilities and entitlements, and the above ideas start us on the path to doing that. The fact is, we’re living longer, and Social Security in particular needs to be adjusted to that reality.
There are at least two ideas in the commission’s recommendations that strike me as terrible. Here’s one, from the WSJ story:
The federal gasoline-tax rate would start to increase from 2013, increasing by 15 cents a gallon at that stage.
And here’s the other, from the New York Times’ take:
The proposed simplification of the tax code would repeal or modify a number of popular tax breaks — including the deductibility of mortgage interest payments — so that income tax rates could be reduced across the board.