WASHINGTON — Unable or unwilling to do it himself, President Barack Obama this week launches a bipartisan commission that is charged with finding a way to slash the government’s skyrocketing budget deficits.
The easy part? Everyone agrees that something has to be done. The hard part? Agreeing on what to do.
Tax the rich? That appeals to liberals, but Obama has already pushed through or proposed more than $1.1 trillion in tax increases over the next decade, many on those who make more than $200,000 a year. Getting more will be difficult.
Reduce spending? Sounds good at Tea Party rallies, but Congress couldn’t agree on $9.2 billion to cut in order to pay for extending jobless benefits, and experts say it would take much deeper reductions in popular programs such as Medicare and Social Security to make a significant dent. That is equally daunting.
Thus, the bipartisan National Commission on Fiscal Responsibility and Reform faces no easy task when it holds its first meeting Tuesday, searching for a bipartisan consensus on ways to reduce the deficit to within 3 percent of the U.S. gross domestic product by 2015.
Under Obama’s proposed budget, this year’s deficit is projected to reach $1.5 trillion, or 10.3 percent of GDP, according to the nonpartisan Congressional Budget Office. It is expected to decrease slightly to $1.3 trillion next year, or 8.9 percent of GDP, and to 4 percent of GDP by 2014. The CBO says it will resume rising again after that, however.
Obama is asking the commission to recommend by Dec. 1 ways to cut deficits further, trying to ensure that any plan is bipartisan by requiring that 14 of the 18 members agree on any recommendation.
“It’s unlikely they’re going to come up with a plan that will get 14 out of 18 votes,” said Robert Bixby, executive director of the Concord Coalition, an anti-deficit group. “It’s quite an uphill climb, but worth taking a shot.”
Deficit-cutting options
Income-tax rates: If applied uniformly across the board, the lowest marginal tax rate would jump from 10 percent to 14 percent and the top rate from 35 percent to 48 percent, according to the nonpartisan Tax Policy Center. “Such dramatic tax increases are politically untenable,” the center said.
Value-added tax: White House aides say Obama isn’t even thinking about a VAT — a national version of a sales tax— but the president himself hasn’t ruled it out.
Spending cuts: Reducing spending is politically hard. When Sen. Tom Coburn, R-Okla., demanded an offset to pay for just $9.2 billion in unemployment benefits, Democrats slammed him, and he lost.
Social Security: The tax on Social Security now stops on incomes above $106,800, a ceiling that rises each year. The government could raise the cap higher or lift it altogether.
