Examining The Deficit Commission's Proposals

The leaders of the commission tasked with bringing the nation's spending problem under control have a plan. Republican Alan Simpson and Democrat Erskine Bowles are asking the commission members to limit spending on defense and health care, while gradually increasing the retirement age to 68. Steve Inskeep talks with NPR's Jim Zarroli about the recommendations — and reaction to them.

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STEVE INSKEEP, host:

This is Morning Edition from NPR News.�Good morning. I'm Steve Inskeep.

Let's follow-up, now, on a proposal to cut the federal deficit over several years. The two chairmen of a bipartisan, presidential panel are recommending dramatic spending cuts and tax hikes. They would raise the retirement age for Social Security, limit or eliminate the mortgage tax break, and cut spending for everything from the Defense Department to the Corporation for Public Broadcasting.

NPR's Jim Zarroli joins us to look at these recommendations.

Jim, good morning.

JIM ZARROLI: Good morning.

INSKEEP: OK. Let's talk about who the two chairman are who made this recommendation.

ZARROLI: Well, Erskine Bowles was Bill Clinton's chief of staff. And Senator Alan Simpson of Wyoming, a former senator, is a Republican. The original idea was to have a sort of bipartisan commission that would come up with proposals to get the deficit down. And then Congress would either have to vote these ideas up or down.

This was an idea that some Republicans, some high profile Republicans supported. But once President Obama came in they worried that the commission would become a vehicle for tax increases. So it didn't go anywhere in Congress.

And instead President Obama appointed a commission anyway, but it doesn't really have the same kind of power. It's got a sort of advisory role. And it is supposed to release a report by December 1st.

INSKEEP: And why would the chairman put out this proposal now, if they full commission hasn't actually voted on what they want to do?

ZARROLI: Well, these were really just some preliminary recommendations that were made by the two cochairmen. The entire commission hasn't even really had a chance to vote on them yet. So this is really just the start of the process.

INSKEEP: I'm looking at this quote from Alan Simpson, the Republican cochairman, who says it's time to lay it out on the table and let the American people start to chew on it. That gets right to the point, I suppose.

ZARROLI: Yeah, I think so. A lot of these ideas are just being put on the table. They're very provocative, you know. And it's a good bet that a lot of these ideas will, you know, undergo some big changes before they even get to Congress.

But it is a sign of how contentious this whole debate is likely to be, that the reaction to just these preliminary proposals was pretty fierce yesterday.

INSKEEP: Yeah, let's talk about that, because there was already talk of cutting spending in an era where there are huge budget deficits. But this seems to have moved everything into overdrive instantly.

ZARROLI: Yeah. Well, some of the cuts are pretty draconian. Tax rates would be lowered. But then at the same time some very popular tax deductions, including the mortgage interest deduction - which, you know, is used by very many people - that would be reduced or eliminated. Defense spending would be cut quite a lot. The federal payroll would be cut by 10 percent. Salaries and bonuses for government workers would be frozen.

Some tax increases, too. Gas taxes would be raised. So would payroll taxes. And finally, the Social Security age - the age which you can qualify for Social Security - would go up to 69 by the year 2075.

And any of these would be by themselves controversial. And taken together they're going to be really a hard sell for Congress.

INSKEEP: So how have lawmakers responded so far?

ZARROLI: Well, I think the reaction has been kind of ambivalent so far. Republican Congressman Paul Ryan, who's known as sort of a big budget hawk, he's on the commission. He said this was a good start.

But then you had a lot of people on the left, very unhappy about these proposals. Democratic Senator Richard Durbin of Illinois said something like, there are things in here I like, things that inspire me. There are things that I hate like the devil hates holy water. And he said I'm not going to vote for this thing.

I think Durbin and a lot of people just kind of see this as putting some ideas on the table to get Congress to begin debating this issue in a serious way, now that the election is over.

I mean, the election made clear the deficit is a very big concern to a lot of voters. So I think the feeling is, you know, maybe this is the moment to try to really get a handle on the deficit if we can get past the political objections. But, of course, that's a big if.

INSKEEP: NPR's Jim Zarroli reporting on a proposal by the cochairmen of the Deficit Commission to reduce the deficit.

Jim, thanks very much.

ZARROLI: You're welcome.

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