Debt Commission - DOA? America Soon to Be!

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President Obama's bipartisan National Commission on Fiscal Responsibility and Reform is better known as the Debt Reduction Committee. It is made up of 18 members, Republican and Democrat, elected officials and some non-elected. They released their report yesterday. Member's comments on the report and process were aired on TV. Despite all the backslapping and mutual admiration comments, the report will definitely not receive a unanimous vote tomorrow. It will quite possibly be dead, on arrival of the vote.

Rep's. Hensarling, Ryan, and Sen.'s Crapo and Tancredo, all Republican, and Rep. Schakowsky, a Democrat, indicated they would not likely be voting for the Commissions Report on Friday. There will be others as well. It is not known yet, but, listening to the remarks, it appeared as though the report, if adopted by a majority, will be by the thinnest of margin. There is, however, no formal obligation of the Congress to take up the Commission's plan for legislation, even if the Commission's members do get a majority vote on the plan tomorrow.

A repeated objection to the report is its failure to deal with the 20 ton whale between our government and a sound economic future; Medicare and Medicaid unfunded mandates. The Commission chose not to address the issue with specifics, though they did address Social Security, which, is ironic since there was general bi-partisan agreement that Social Security was not a pressing fiscal issue. At worst, it was said, if left unaddressed, the result would be a 22% cut in benefits in a couple decades from now to remain solvent.

Regarding health care, the Commission could only agree on setting goals, not how to achieve them. They recommended capping growth in total federal health spending, to include Medicare and health insurance subsidies, to the rate of economic growth plus 1%. They also propose reforming physician payments, cost-sharing with Medicare beneficiaries, malpractice law reform, and prescription drug cost reductions. Again, how to achieve those goals were not addressed, which will leave Republicans in Congress seeking to rescind this year's health care reform, and Democrats seeking to enhance it.

This is truly a 'Black Hole' issue when talking about saving America from debt and deficits, because health care is the single largest threat going forward, not only to the government's debt growth, but, to the quality of life of most Americans going forward. There can be no escape from nation destroying debt, if health care in America is not addressed and resolved in a fashion which, both satisfies voter's demand for health care access and reverses the government's debt obligations for health care going forward. 

One unanimous agreement amongst all Commission speakers was their acceptance of the fact that America's future is in peril as a result of fiscal irresponsibility and lack of budgetary discipline. Predictably, the Republicans on the Commission had grave concerns over tax increases, and Democrats had grave concerns over spending cuts and changes to Social Security. All agreed that fundamental tax structure reform was a necessity, as our current tax system seriously impedes the ability of our nation's businesses to compete with foreign competitors.

Another gross oversight in the Commission's plan is their failure to specifically address tax cut earmarks which cost the federal government $1 trillion dollars a year in revenues. They addressed appropriation earmarks with procedural requirements that would greatly reduce earmark spending but which represent a small fraction of the cost of tax earmarks. As everyone knows, tax cut promises are the heart and soul of reelection campaigns these days. So, don't look for Congress to attempt to recover that 1 trillion dollar a year revenue loss due to tax cut giveaways for campaign contributors and lobbying special interests.
 
This topic highlights and predicts what the response in Congress will be to the issue of deficit and debt reduction. Republicans will reject increasing tax revenues, and Democrats will reject significant changes to entitlement spending unless the Public Option is brought back on the table, which Republicans will oppose vehemently. Rep. Hensarling warned however, that if health care entitlement spending and inflation are not addressed proactively in the near term, our nation will be forced onto a Public Option path down the road. I found Hensarling's comment enormously insightful.

The one great result of this Commission's work is putting the deficit and debt issue front and center before the American public and the U.S. Congress. Having put it there, it will remain an election year hot potato for many election cycles to come, as well it must be. Failure to adequately address these fiscal issues, will, without question, according to the Commission, bury America's future under a pile of growing debt.  

The disposition of this Commission's report in the halls of Congress is predictable. Some of the measures in the report will be implemented, others will never get bi-partisan consensus, and still others will accepted as necessary, but, political suicide in reelection terms, and therefore, put off for some future suicidal Congress to address. What that means for America's future, carries no good news within it.

Some of the most poignant comments came from Sen. Tom Tancredo (R), who stated the American Dream was predicated on sacrifice to provide the next generation with more and better than the current one. Failure to turn the deficits and debt path around will most certainly kill the American Dream, he said. I found his insight regarding American history predicated upon mutual sacrifice, profoundly worth noting. It is time for the Democrats and Republicans in the U.S. Congress to take his words to heart, and sacrifice ideological and partisan ground in order to save the American Dream. 

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This page contains a single entry by David R. Remer published on December 2, 2010 2:22 AM.

Obama's Last Chance. was the previous entry in this blog.

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