The midnight deadline for the Supercommittee to create a credible debt reduction deal is fast approaching. News articles, political pundits and reports from staffers close to the negotiations represent the only agreement coming out of Washington, that committee has failed in its mission. Even some of the committee members have shown clear signs that they have resigned themselves to the inevitable.
While it is confounding for the public to understand why their representatives in Congress cannot reach some agreement on anything, it’s all the more frustrating that these negotiations have been played out twice before. With attention focused on the Supercommittee, the fast pace of the media has forgotten the plans two other committees, Obama’s Bipartisan Debt Commission and the Gang of Six, create over the past year. There was no need for a third committee, no need to reinvent the wheel again. Despite small differences both committees created very similar plans.
The Gang of Six, a group made up of 3 Democrats and 3 Republicans, created a proposal for debt reduction to end this summer’s debt ceiling battle. The plan would;
Cut deficits by $3.7 trillion over 10 years by cutting defense and other discretionary spending.
Freeze congressional pay and put caps on discretionary spending
Require congressional committees to find billions in entitlement savings over the next 10 years
Create long-term tax code reforms by eliminating many tax breaks and use the savings to pay down the debt.
Cut the $1.7 trillion Alternative Minimum Tax and the $298 billion Sustainable Growth Rate formula for Medicare which has been kicked down the road many times..
And overhaul Social Security and put savings towards longer-term solvency.
In December 2010 President Obama’s Bipartisan Debt Commission, an 18 member commission made up of 12 congressmen (6 Republicans and 6 Democrats), 2 CEO’s, a senior fellow at the Brookings Institute, the president of the Service Employees International Union, a former Republican senator from Wyoming and a former Chief of Staff to President Clinton, created what is now called the Bowles-Simpson plan. That plan cuts about $4 trillion from the projected deficit through 2020. It accomplished this through discretionary and defense spending cuts and tax code reform. Tax reform included the elimination of the Alternative Minimum Tax and reduce tax breaks. It would also reform Social Security and Medicare making them solvent through 2075.
During an interview this morning Jon Kyl, infamous for his Planned Parenthood, “not meant to be factual statements”, House floor claims, continued to say, “You don’t raise taxes in a recession”, maybe so but the Senator doesn’t seem to realize that we’re not in a recession, we’re in a recovery. And looking back through the history of mid-20th Century recessions you also do not cut spending during recoveries. He repeated the Republican mantra not to raise taxes on “job creators”, a stance which has over the last year been largely discredited as an effective means for job creation. The adherence to this Field of Dreams “Build it and they will come” philosophy does not work in this current situation. Consumer demand is the driver for job creation, not tax cuts. In what could be viewed as icing on the cake, a recent Congressional Budget Office report, commissioned by Senator’s Max Baucus (D-Montana) and Charles Grassley (R-Iowa), illustrated significant growth of income inequality from 1979 to 2007 favoring the Top 1%. In a surprising turn Republican Oklahoma Senator Tom Coburn penned in a letter which accompanied the report sent to his colleagues;
“From tax write-offs for gambling losses, vacation homes, and luxury yachts to subsidies for their ranches and estates, the government is subsidizing the lifestyles of the rich and famous. Multi-millionaires are even receiving government checks for not working. This welfare for the well-off — costing billions of dollars each year — is being paid for with the taxes of the less fortunate, many who are working two jobs just to make ends meet, and IOUs to be paid off by future generations,”
Will congressional Republicans listen more attentively now that this is coming from one of their own?
For their part, Democrats are opposed to any cuts in entitlements such as Medicare. Yet instead of across the board cuts, substantive reforms including a switch from pay for procedure to patient centered treatments and reduction of fraud are credible cost reducing measures. Much of this, however is already included in the Affordable Care Act. As of January 2011 Medicare/Medicaid fraud stings accounted for $4 billion in savings and an additional bust in September 2011 resulted in charges against 91 people who had defrauded the system for approximately $300 million.
As many have concluded over the last year the US Congress has grown ineffective. Partisan divide has slowed the recovery from the worst economic crisis since the Great Depression to a stagnate pace. Adherence to out-of-touch policies, irrational philosophies and outside pledges hamper the overall recovery process to the detriment of the country as a whole. Congress had two opportunities to institute substantive deficit reduction plans, yet their solution was to form another committee to tackle the same problem a third time. Given the current political situation the results were predictable. Now, with this failure to act, the country’s fiscal house may once again be subject to another credit downgrade. With this addition to an ever-growing list of congressional partisanship-based debacles, will it be the final indignity to the country which insights the American voting public to cry out in a clear voice, “No more gridlock!”, “No more childish bickering!” and demand nothing less than moderation and compromise for the good of us all?