Task Force Examines Debt, Slow Pace Of Recovery

Former Sen. Pete Domenici warned Wednesday that America's mounting federal debt is a "quiet killer," eating away at the foundation of the country. Domenici, with former Federal Reserve Vice Chair Alice Rivlin, co-chairs a bipartisan task force recommending big changes in the way the government spends and raises money.

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America's mounting debt is a quiet killer, according to former Senator Pete Domenici. He is co-chairing a bipartisan task force that released its report today on ways to slash the deficit. In a few minutes, we'll hear from the leaders of another deficit commission, which inspired cheers and loud boos last week with its report.

First, here's NPR's Scott Horsley on the report released today.

SCOTT HORSLEY: The task force actually looked at two big problems: the growing federal debt and the slow pace of recovery that's left millions of Americans out of work. Alice Rivlin, who used to run the White House and Congressional Budget Offices, suggests the government could encourage hiring by suspending for a year the payroll tax that workers and employers pay for Social Security.

Ms. ALICE RIVLIN (Co-Chair, Bipartisan Task Force): It would put money in paychecks of all wager earners in America and it would be a significant boost to the economy.

HORSLEY: The task force is also recommending a new national sales tax and a major overhaul of the income tax system. Tax rates for individuals and companies would come down, but most deductions would be cut back or eliminated.

For every dollar in tax increases, the task force hoped to recommend two dollars in spending cuts. But it found that too Draconian. Instead, the recommended ratio is more like one and a quarter to one. Even so, co-chair Pete Domenici and his colleagues want to curtail spending on nearly all federal programs, including Medicare, Social Security and defense.

Mr. PETE DOMENICI (Co-Chair, Bipartisan Task Force): There is no way for this plan to get implemented unless everybody agrees that they will sacrifice, much as we did to win the Second World War, everybody got involved and we won it. This is going to be something like it - that in a big top war.

HORSLEY: There are bound to be political battles if any of the taskforce recommendations actually make it to Congress. Even the members of the task force were unable to agree on every recommendation, though they did endorse the overall package.

Scott Horsley, NPR News, Washington.

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