The Big Question: What is the best, worst idea from the debt panel?


Dean Baker,
co-director of the Center for Economic and Policy Research, said:
The best recommendations were eliminating the tax break for cafeteria plans. This is the most hare-brained tax break ever designed. The administrative costs and other waste involved in providing people with a relatively small tax break is absurd.

Cutting Social Security for current middle-class retirees (against their promise) and even more for future middle-class retirees is the worst idea. These people paid for their benefits. And because of the economic mismanagement of the people on this commission and their friends, which wiped out the middle class's housing wealth, the middle class is going to need its Social Security even more in the future than in the past.

Paul Kawika Martin, policy and political director of Peace Action, said:
The best recommendations revealed in yesterday's release of the draft of recommendations from President's Obama's debt commission centered on military budget reductions. The commission wants to trim the base military budget by about $100 billion in 2015 – a reduction of approximately 15 percent.

That might seem like a lot, but remember that the U.S. military budget is almost as large as the rest of world's military budgets combined. Since 1998, military spending soared a staggering 96 percent. It accounts for nearly 65 percent of the increase of discretionary spending since 2011.

Why the increase? Of course, we have the wars in Iraq and Afghanistan. And there's the power and influence of the Pentagon combined with the lobbying power of enormous military contractors like Lockheed Martin. Many Republicans, despite their fiscal conservative and anti-big government rhetoric, and Democrats, afraid of looking weak on defense, are happy to appropriate funds to the Pentagon and to contractors making widgets in their districts.

Sen. Tom Coburn, a commissioner, and Chairman Barney Frank are exceptions. Frank asked me and other experts like Chris Preble from CATO to join the Sustainable Defense Task Force (http://www.comw.org/pda/fulltext/DDDoverview.pdf) where our report suggests reductions to the military budget of similar levels.

For example, America continues to keep nearly 1,000 expensive military bases around the world. The commission recommends removing one third of them.

The commission plan would be better if it looked past 2015 and didn't rely so much on savings from efficiencies. Also, the commission did not look at the very expensive wars abroad. Noble Prize-winning economist Joseph Stiglitz and Harvard professor Linda Bilmes estimate the costs for the wars in Iraq and Afghanistan could top a staggering $5 trillion to $7 trillion.

Congress and the administration need to look seriously at reductions of at least 15 percent. Even more can be done without affecting the security of Americans while freeing up funds for deficit reduction, job creation and other human needs.

Brad Delong, professor of Economics at the UC Berkley, said:
Well, two things tie for the worst thing about the president's deficit-reduction commission.

The first is Barack Obama's decision to take a long-time budget arsonist like Alan Simpson — somebody who never found a budget-busting Republican initiative he could not vote for or a deficit-reducing Democratic initiative he could not vote against — and give him a fire chief's hat. As a result, Alan Simpson's ideas are now not Alan Simpson's ideas but instead the "recommendation[s][ from the president's debt commission."

The second is the capping of federal health spending growth at GDP+1 percent/year. That means that, adjusting the aging of the population, the government is supposed to spend a smaller share of people's incomes on health care as each year passes. That would require not just the repeal of the Affordable Care Act but the elimination of Medicare as we know it.

The best idea ... is it cutting schools for soldiers' kids? Or is it paying for reductions in cutting the Earned Income Tax Credit

John Feehery, Pundits Blog Contributor, said:
The worst is getting rid of the mortgage interest deduction. The best is Social Security reform.


Justin Raimondo,
editorial director of Antiwar.com, said:

The best: "defense" (i.e. military) cuts

The worst: mortgage deductions

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