President Barack Obama’s 18 member National Commission on Fiscal Responsibility and Reform (commission) just voted 11-7 in support of the commission’s official report. This is three votes short of the 14-vote mark President Obama said would be needed before the report could be sent to Congress.
While the commission deserves credit for addressing this problem, the report contains far too many tax hikes, and far too little spending cuts to be a workable solution. The Heritage Foundation’s Brian Riedl critique of the report mirrors the one made by Rep. Paul Ryan (R-WI) in the video at right. Riedl writes:
Expanding spending—not declining revenues—drives America’s long-term deficits. Even if all tax cuts are extended, revenues will soon slightly exceed their historical average of 18 percent of the economy. Federal spending—rising from its historical average of 20 percent of the economy to a projected 26 percent by the end of the decade—is the moving variable.
Overall, the fiscal commission would raise taxes by $3.3 trillion over the decade. Yet it recommends only minor tweaks to a broken health care system, fails to repeal Obamacare, and focuses Social Security reform too far on the tax side. Discretionary spending is the only source of significant first-decade spending restraint.
Surely larger entitlement savings are expected in future decades, yet much more can be done sooner. Lawmakers examining the commission report should demand stronger entitlement reform—particularly in health care, with a plan by Representative Paul Ryan (R–WI) and economist Alice Rivlin as the model—and not settle for a plan that leaves the highest sustained tax burden in American history.