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Tax Hikes Wrong Route to Take for Deficit Reduction Commission
Posted By Kathryn Nix On April 19, 2010 @ 7:00 pm In Economics | Comments Disabled
Earlier this year, after Congress passed an increase in the debt ceiling, was deliberating over a trillion plus health care package, and the President’s Budget promised new record deficits, the American people started to see a worrisome trend that pushed fiscal responsibility to the forefront of the public’s priorities. President Obama responded by creating the National Commission on Fiscal Responsibility and Reform, a bipartisan commission tasked with submitting a solution to the nation’s fiscal woes by the end of the year. Problem solved, right?
Well, not quite. The true success of the commission lies not in its very existence, nor in its ability to reduce the deficit, but rather in the very means by which it proposes to accomplish this. An article in the New York Times  today lists several ways in which the commission could propose to reduce the deficit that would cause more harm than good:
If the President’s commission focuses only on tax increases, its proposal will not only fail to adequately address Washington’s major spending problem, but will also spell disaster for economic recovery and future prosperity. To be successful, controlling the deficit should focus primarily on reforming the three big-ticket entitlement programs: Medicare, Medicaid, and Social Security.
Unfortunately, serious consideration of major entitlement reform is unlikely to happen. The President set a goal of reducing the deficit to 3 percent of Gross Domestic Product within a decade. While entitlement reform is crucial, the benefits would be long-term, so pursuing this politically difficult path to reform would serve no political purpose for President Obama.
A successful commission  would propose systemic reforms to all three major entitlement programs , including sticking to a long-term sustainable budget. Implementing serious budget process reform  would require active participation by Congress in setting federal spending, putting more pressure on lawmakers to act responsibly. Reining in federal spending can be done, but increasing taxes alone would not only be ineffective, but would also have major ramifications for the U.S. economy.
Article printed from The Foundry: Conservative Policy News from The Heritage Foundation: http://blog.heritage.org
URL to article: http://blog.heritage.org/2010/04/19/tax-hikes-wrong-route-to-take-for-deficit-reduction-commission/
URLs in this post:
 article in the New York Times: http://thecaucus.blogs.nytimes.com/2010/04/18/reduction-is-theme-of-presidents-next-act/?scp=1&sq=reduction%20is%20theme&st=cse
 As Heritage analyst Karen Campbell writes: http://www.heritage.org/Research/Reports/2008/07/How-Rising-Gas-Prices-Hurt-American-Households
 value-added tax: http://www.foundry.org/2010/04/15/europe%e2%80%99s-record-shows-vat-is-no-solution-to-debt/
 agreed: http://www.foundry.org/2010/04/15/mccain-throws-down-the-vat-gauntlet
 successful commission: http://www.heritage.org/Research/Reports/2009/11/Bipartisan-Entitlement-Commission-Needed-to-Control-Spending-and-Debt
 reforms to all three major entitlement programs: http://www.heritage.org/Research/Reports/2008/03/Taking-Back-our-Fiscal-Future
 budget process reform: http://www.heritage.org/Research/Reports/2009/01/Any-Stimulus-Legislation-Must-Include-Budget-Reforms-to-Address-Long-Term-Challenges
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