US Deficit Commission Heads Will Present Final Plan Wednesday
WASHINGTON (Dow Jones)--Leaders of a White House commission Tuesday said they would delay until Friday a final vote on a plan to hold down long-term federal spending by at least $3.8 trillion on Wednesday.
The slight delay is meant to give members more time to review the document, which is still receiving final touches. Even with the extra time, it isn't clear how many of the 18 panel members will endorse a package that includes what would be unpopular changes to the tax system and sharp spending cuts.
Regardless, the commission cochairmen said they had focused the American public on the potential fallout of the burgeoning debt caused by years of federal spending in excess of income.
"The era of deficit denial in Washington is over. I don't think there is a soul left in America who doesn't understand that this deficit and debt is like a cancer and is going to destroy our country from within if we don't face up to it and face up to it quickly," said Erskine Bowles, Democratic cochairman of the panel, along with former Wyoming Sen. Alan Simpson, a Republican.
Bowles, who was chief of staff to President Clinton, and Simpson need 14 of the 18 members of the National Commission on Fiscal Responsibility and Reform to support a proposal in order to issue a formal recommendation, which could then be voted on by Congress.
Simpson said he had hoped legislative language would be ready by now but the panel had run out of time. But Senate Majority Leader Harry Reid (D., Nev.) had told the chairmen that a vote would be possible in the Senate next year.
However, Simpson said they hadn't asked incoming House Speaker John Boehner (R., Ohio) for a similar commitment.
Earlier this month, the two proposed sweeping changes to tax and spending policy in an effort to cut the budget deficit by hundreds of billions of dollars a year and, ultimately, hold down the growth of the federal debt by about $3.8 trillion by 2020.
The budget deficit, or the amount by which federal expenditures exceed revenues each year, was about $1.3 trillion for fiscal year 2010, which ended on Sept. 30. The current national debt is roughly $13.8 trillion.
The cochairmen proposed big spending cuts along with lowering corporate and income tax rates while eliminating some tax breaks, but quickly encountered opposition among panel members and interest groups.
The two initially proposed $100 billion in Defense Department cuts and another $100 billion in savings on other domestic programs, including a federal wage freeze, workforce cuts and elimination of contractors.
Simpson and Bowles tried to avoid revealing too many details of the final plan. The final version is expected to be released publicly Wednesday morning.
But both did mention some specific points that had been outlined as options and now appear set for the final version.
For example, it appears the two will recommend eliminating tax deductions for mortgage-interest payments and other loopholes popular with the middle class and corporations.
"We have proposed eliminating these tax earmarks, which amount to $1.1 trillion a year," Bowles said. Such a move would be coupled with a simpler tax code and lower rates of 8%, 14% and 23% for individuals, and 26% for companies.
The proposal also is likely to include changes to Social Security, such as smaller benefits for wealthier Americans and a later retirement age.
Both men acknowledged that opposition would be strong.
"The far left and the far right are going to rip this thing to shreds and do it with zeal," Simpson said. "We will listen in the next few days to the same old crap I have been dealing with in all my public life: emotion, fear, guilt and racism."
The panel members are Sen. Max Baucus (D. Mont.), Rep. Xavier Becerra (D., Calif.), Rep. Dave Camp (R., Mich.), Sen. Tom Coburn (R., Okla.), Sen. Kent Conrad (D., N.D.), David Cote, chairman and chief executive of Honeywell International Inc. (HON), Sen. Mike Crapo (R., Idaho), Sen. Richard Durbin (D., Ill.), Ann Fudge, former chief executive of Young & Rubicam Brands, Sen. Judd Gregg (R., N.H.), Rep. Jeb Hensarling (R., Texas), Alice Rivlin, former director of the White House's Office of Management and Budget, Rep. Paul Ryan (R., Wis.), Rep. Jan Schakowsky (D., Ill.), Rep. John Spratt (D., S.C.), and Andrew Stern, president of the Service Employees International Union.
Asked during a television interview to share her thoughts about Mrs Palin, Mrs Bush replied: "I sat next to her once, thought she was beautiful."
With pursed lips, she added: "And I think she's very happy in Alaska. And I hope she'll stay there."
Mrs Palin, who campaigned alongside John McCain in the 2008 election as his vice-presidential candidate, has admitted that she is seriously considering a bid for the 2012 Republican nomination at a time when her national exposure has never been higher.
Her second book, America by Heart, is published on Tuesday and is likely to be another bestseller, the second episode of her TV show, Sarah Palin's Alaska aired last night, while on Monday her 20-year-old daughter Bristol will compete in the final of television's Dancing with the Stars.
The book is billed as a tribute to conservative American values. It includes attacks on President Barack Obama and Michelle Obama, the First Lady, as unpatriotic and criticises John F Kennedy for shunning his Catholic faith.
According to an early copy of the book purchased by the Associated Press, Mrs Palin discusses at length Kennedy's noted speech on religion during the 1960 campaign, when he said: "I am the Democratic Party's candidate for president, who happens also to be a Catholic."
Mrs Palin said that Kennedy – the first Catholic elected president – "essentially declared religion to be such a private matter that it was irrelevant to the kind of country we are".
Ted Widmer, a historian and former speech writer for Bill Clinton, said: "It's putting a negative spin on what was interpreted at the time as a sensible and uplifting message. JFK was trying to protect his own right to be a Catholic and to run for president."
Mrs Palin's ability to cross over from politics to popular culture, combined with what critics regard as an inflated self-regard, has unnerved many old school Republicans who think that she is not only unworthy of the presidential nomination but would cost the party the White House.
She however enjoys substantial grassroots support from fans, mostly connected with the Tea Party movement, who prize her straight talking and atypical approach to politics. Polls show that among Republican voters she is the most popular of the likely 2012 candidates, though she is not always chosen as their favourite for the nomination.
Karl Rove, the former adviser to George W Bush, recently suggested in an interview with the Daily Telegraph that Mrs Palin lacked the "gravitas" for the most demanding job in the world. He also suggested her television show was unpresidential.
Mrs Palin's retort that Ronald Reagan had enjoyed a career in popular entertainment before becoming president brought an angry response from Peggy Noonan, a columnist and Mr Reagan's favourite speech writer. She called the Alaskan a "nincompoop" for making the comparison.
"The point is not 'He was a great man and you are a nincompoop,' though that is true," Mrs Noonan wrote.
"The point is that Reagan's career is a guide, not only for the Tea Party but for all in politics. He brought his fully mature, fully seasoned self into politics with him. He wasn't in search of a life when he ran for office, and he wasn't in search of fame; he'd already lived a life, he was already well known, he'd accomplished things in the world."
Her potential rivals for the nomination have however been conspicuously absent in their criticism, either public or private, worried that a pre-emptive attack could wreck their own chances.
