The Fiscal Commission Co-Chair Report

I read through the proposed reforms suggested by the two co-chairs of the president's fiscal commission. Two things came to mind. First, these ideas are the type of sweeping changes that could actually begin to get the U.S. fiscal situation under control. But second, they are not viable politically. Pretty much everyone's sacred cow get's slaughtered. The chance that a majority of these proposals could be enacted is almost zero. Here's a list of the specifics from the link above, and my quick reaction to each. Overall, I'm on-board with many of the ideas. My comments in [brackets].

Social Security cuts:

• Index the retirement age to longevity -- i.e., increase the retirement age to qualify for Social Security -- to age 69 by 2075. [People are living longer and working longer. Good idea]
  
• Index Social Security yearly increases to a lower inflation rate, which will generally mean lower cost of living increases and less money per average recipient. [yes]
  
• "Increase progressivity of benefit formula" -- i.e., reduce benefits by 2050 for middle, and, especially, higher earners, relative to current benefits. [definitely. I would eliminate payouts entirely for high earners.]
  
• Increase the Social Security contribution ceiling: while people only pay Social Security taxes on the first $106,800 of their wages today, that's only about 86% of the total potentially taxable wages. The co-chairs suggest raising the ceiling to capture 90% of wages. [Eliminate the ceiling entirely. There's no reason the entire salary of lower earners should be taxed while higher earners escape withholding over 106k]
  

Tax reform:

• The co-chairs suggest capping both government expenditures and revenue at 21% of GDP eventually. [not sure about this level]
  
• In their first plan, called "The Zero Plan," they suggest reducing the tax brackets to three personal brackets and one corporate rate while eliminated all credits and deductions. Without any credits or deductions (including the EITC and mortgage interest deductions), the 3 tax rates would be 8, 14 and 23 percent. [maybe. I prefer a flat tax for all]
  
• In their second plan, they would increase the personal deduction to $15,000, create 3 tax brackets (15, 25 and 35%); repeal or significantly curtail a number of popular tax deductions (including the state and local deduction and the mortgage interest deduction); and eliminate other tax expenditures. [see above]
  
• The third plan would force Congress to undertake comprehensive tax reform by 2012 by raising taxes for each year Congress fails to act. [sounds like a bad idea]
  
• All their proposals limit Congress to collecting taxes on income made within the United States, reducing or eliminating taxes on American expats and revenues companies earn abroad. [Good idea]
  
• They also suggest raising the federal gas tax by 15 cents per gallon. [Terrible idea that will damage the economy. Gas taxes should be lowered].
  

Medicaid/Medicare cuts

• Force more low-income individuals into Medicaid managed care. [probably necessary]
  
• Increase Medicaid co-pays. [This will definitely hurt the poor badly and keep some from going to the doctor. Small increase maybe, but most who have Medicaid can't afford high co-pays]
  
• Accelerate already-planned cuts to Medicare Advantage and home health care programs. [unfortunately necessary]
  
• Create a cap for Medicaid/Medicare growth that would force Congress and the President to increase premiums or co-pays or raise the Medicare eligibility age (among other options) if the system encounters cost overruns over the course of 5 years. [not sure about these caps]
  

Discretionary spending cuts

• Eliminate all earmarks. [Definitely]
  
• Eliminate the Office of Safe and Drug-Free Schools. [Cut way more government offices]
  
• Freeze federal worker wage increases through 2014; eliminate 200,000 federal jobs by 2020; and eliminate 250,000 federal non-defense contractor jobs by 2015. [Good idea but even more could be cut]
  
• Eliminate subsidized student loans, in which the government makes interest payments while the student is in school. [Definitely]
  
• Establish co-pays in the VA medical system and change the co-pays and deductibles for military retirees that remain in that system. [I oppose this. I think we owe our veterans medical care]
  
• Eliminate NASA funding for commercial space flight. [Definitely. Commercial space flight should be funded by free enterprise].
  
• Require the Smithsonian museums to start charging entrance fees and raise fees at the national parks. [Good idea]
  
• Eliminate funding to the Corporation for Public Broadcasting -- which many conservatives suggested in the wake of the firing of former NPR contributor Juan Williams. [Should already be eliminated. Eliminate numerous other grants to the arts].
  
• Reduce farm subsidies by $3 billion per year. [or more]
  
• Create a Committee to eliminate unnecessary programs to the tune of $11 billion by 2015. [Cut them instead of creating another committee]
  
• Merge the Department of Commerce and the Small Business Administration and cut its budget by 10 percent. [ok]
  
• End "low-priority" Army Corps of Engineers programs to the tune of $1 billion by 2015. [Sounds good]
  
• Cut the State Department's overseas budget by 10 percent by 2015; reduce the proposed foreign aid budget by 10 percent in 2015; and cut voluntary contributions to the United Nations by 10 percent in 2015. [Cut the foreign aid budget by at least 50%. Eliminate all voluntarily contributions to the UN]
  
• Eliminate the Overseas Private Investment Corporation, which provides subsidized financing and political risk insurance for U.S. companies' investments abroad. [yes]
  
• Cut $900 million in fossil fuel research funds. [ok]
  
• Force airlines to increase their contributions to airline security costs and allow them to increase per-ticket security fees. [This would drive up the price of air travel and possibly damage the economy. Not a good idea]
  

Defense spending cuts:

• Double the number of defense contractor positions scheduled for elimination from 10 percent of current staff augmentees to 20 percent. [sounds good]
  
• Reduce procurement by 15 percent, or $20 billion. [There have to be these sorts of across the board cuts, no matter how painful they are]
  
• Eliminate the V-22 Osprey program. [probably necessary]
  
• Cancel the Marine Corps' Expeditionary Fighting Vehicle program. [yes]
  
• Halve the number of F-35 Joint Strike Fighters in favor of F-16s and F/A-18Es. [yes]
  
• Cancel the Marine Corps F-35 program. [yes]
  
• Cancel the Navy's Future Maritime Prepositioning Force. [maybe]
  
• Cancel the new Joint Light Tactical Vehicle (JLTV), the Ground Combat Vehicle, and the Joint Tactical Radio. [not sure about these cuts.]
  
• Reduce military forces in Europe and Asia by one-third. [Forces in Europe should have been reduced long ago]
  
• Send all military children based in the U.S. to local schools. [sounds reasonable]