Fiscal panel co-chief dismisses earmark ban as no more than 'sparrow belch'

Former Sen. Alan Simpson (Wyo.), the Republican co-chairman of the White House fiscal commission, has dismissed a new moratorium on earmarks as no more consequential than a “sparrow belch.”
 
The Senate Republican Conference adopted a two-year moratorium on earmarks this week after much debate, and Republicans are pressing Democrats to follow their example.
 

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Senate Majority Leader Harry Reid (D-Nev.) on Thursday agreed to vote on an amendment to the food-safety bill that would implement a three-year earmark ban covering both parties.
 
Lawmakers directed $15.9 billion worth of earmarks to their districts for fiscal year 2010, according to an analysis earlier this year by Taxpayers for Common Sense. That’s about 1 percent of the $1.5 trillion federal deficit projected for 2010.
 
Erskine Bowles, the Democratic co-chairman of the fiscal commission, said Congress spends considerably more on earmarks embedded in tax bills. He scolded the media for not paying more attention to tax earmarks.
 
“There are $1.1 trillion in annual earmarks in the tax bills and you give them a free ride,” Bowles said. “It’s crazy, it’s one of the reason why our tax rates are so high.”
 
Bowles and Simpson spoke to reporters Friday morning at a breakfast sponsored by The Christian Science Monitor.
 
The co-chairmen of the fiscal commission created by President Obama have proposed wiping the tax code clean of special tax breaks and consolidating income tax rates into three lower brackets. The top bracket rate would drop from 35 percent to 23 percent under the Bowles-Simpson plan.
 
Simpson also criticized Congress for not raising taxes to pay for the wars in Iraq and Afghanistan. 
 
“We have had a tax to support every single war in our history, the Revolutionary on in,” said Simpson. “We’re fighting two wars with no tax to support it.”
 
“If you’re going to fight a war, much less two of them, you ought to have a tax to support it to let the American people know there’s a sacrifice involved other than the people who are fighting it,” Simpson said.
 
The chairmen warned that international financial markets would react dramatically if the federal government did not cut its deficit in the next few years.
 
Simpson noted that the U.S. is borrowing 39 cents for every dollar it spends.
 
Bowles said annual interest on the debt is $200 billion a year and warned it could rise to $1 trillion a year by 2020 if Congress does not act to cut spending and raise revenues.
 
The chairmen have called for $1.4 trillion in discretionary spending cuts, $733 billion in mandatory spending reductions and $751 billion in new tax revenues over the next 10 years. Their plan would reduce the deficit by $3.83 trillion by 2020.
 
Allowing the 2001 and 2003 tax cuts passed under George W. Bush to expire would save about $4 trillion over the next decade.
 
Allowing tax rates across the board to reset has begun to look more attractive to some congressional Democrats. Several Senate Democrats have balked at making the Bush-era tax cuts for the middle class permanent, even though Obama has made this the centerpiece of his tax plan.
 
Bowles called on Congress to focus on tax reform rather than extending the Bush tax cuts.
 
“I’d say that people in my tax bracket don’t need a tax cut and I’d say that what you really need is real tax reform and get rid of these earmarks in the tax code,” he said. “I think we’re going to have to enact tax reform, I don’t see any way around it.”
 
The fiscal commission must report its recommendations to Obama and Congress by Dec. 1. Fourteen of the 18 members of the panel must endorse the proposal for it to become official.
 
During a brief interview in the Senate on Thursday, Bowles acknowledged it would be difficult to reach consensus.
 
“It’s a tough slog,” he said.
 
But Bowles insisted he and Simpson would not ask for an extension of the deadline.
 
Simpson said members of the commission spent months building a working relationship.
 
“It took us three months to establish trust within this commission, because the first blast was ‘We wouldn’t be here if George W. Bush hadn’t done what he did,’ and the second blast was ‘But this president has done four times more than that,’ ” Simpson said.