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  • Heritage Reacts to Simpson-Bowles Deficit Reduction Panel Proposal

    The draft proposal issued Wednesday by the co-chairmen of President Obama’s Deficit Reduction panel has both strengths and weaknesses.. Heritage Foundation analysts are still poring through this preliminary document, and we will have more to say in the days to come. Already, we see the following:

    One great flaw in the proposal is the massive tax increase proposed by the co-chairmen, former Sen. Alan Simpson (R-Wyo) and former Clinton Chief of Staff Erskine Bowles. They would hike taxes to 21% of America’s economic output (i.e., gross domestic product or GDP), well over the historical average of 18% of GDP. The debt and deficit problems America faces stem from too much spending, and not too little taxes. We need to cut spending, and not raise taxes.

    The co-chairmen did not go far enough in proposing spending cuts. For example, the $100 billion in cuts to domestic spending are a good start, including their ban on earmarks. But, they should go further. The Heritage Foundation seeks at a minimum an immediate freeze of Federal spending for fiscal year 2011 at the previous year’s level and cuts of $170 billion for 2012 (measuring from the CBO baseline). Heritage published a list of over $300 billion in spending cuts, so the options are available to reach or exceed the goal of cutting $170 billion.

    But perhaps the worst flaw in the co-chairmen’s proposal is the substantial reduction to defense spending. A strong defense of America and its interests is the first obligation of government. Instead of cutting defense spending, the country needs to provide for defense an average of $720 billion per year (to be adjusted for inflation) for each of the next five fiscal years.

    We’d be remiss, of course, not to mention the strengths. The Heritage Foundation has long recognized, as the chairmen’s proposal also recognizes, that the ultimate solution to a government that is too large and spends too much is to get entitlement program spending — especially medicare, medicaid, and social security spending — under control.

    Watch this spot for a more in-depth analysis in the days to come.

    Posted in Ongoing Priorities [slideshow_deploy]

    28 Responses to Heritage Reacts to Simpson-Bowles Deficit Reduction Panel Proposal

    1. gcoug, WA says:

      When the budget gets tight in this house you do away with the frills. When the budget gets tighter everyone works. When the budget gets tighter its time to downsize and get rid of non-essential services and property. No where in any of those scenarios is room to pay more taxes. Boehner is spot on with reducing costs by traveling commercial and the rest of the government should follow. Get rid of pork and all non-essential garbage. Reduce debt by stopping spending, saving anywhere and everywhere, and pay the bills now and not let them get larger.

    2. George Colgrove, VA says:

      The plan relies on significant tax increases at the same time requires minimal cuts in the federal government. This is what frustrates me. The national security issue with our debt was authored by congress and the president and implemented by federal employees over the last 10 years. They as a collective body have robbed generations of Americans of an enjoyable and secure life. When crunch time comes, who has to further sacrifice? The American people. Sure, some of what the report contains is bold, but the period for some of the solutions is measured in decades. We need immediate action. The HF has shown the federal government that they can cut $300 billion (with very obvious, simple, and basic cuts) and has defined a failure plateau of $170 billion. Its members (i.e. American citizens) have gone even further asking for deeper and more meaningful cuts. I think the American people have sacrificed too much and for too long. It is the federal governments turn.

      As for the tax increase options – take them off the table. We need tax cuts made at all levels. For the tax cuts suggested, we will take those as well. Replace the revenue amounts for the tax increases with even deeper cuts to the government. The HF and its members have the answers. All over the world, in countries far smaller than ours, government agencies are closing down and government employees are being let go in the order of 500,000. They get it. We need to do even better than that.

      This discussion should not be how do we protect and save the government institutions, but how do we protect and save America. Countries all over the globe are running out of tolerance of the federal government’s reckless behavior. More and more experts in global diplomacy, the economy and in national security are seeing the national debt as the premier national security threat to the United States – even above terrorism. A massive debt created by the institutions that now use obfuscations in the desperate pursuit to save themselves.

      Over numerous decades, the federal government has failed to deliver on what its own statutes have dictated. We have attempted to fix these problems by adding more statutes and more layers of government and oversight over the numerous problems areas. Areas that now encompass nearly all of the federal government! We have witnessed decades of corruption, crimes, and recently an unabashful pursuit of personal interest, privilege and wealth by the president, congress members and especially the federal employees. The problems have been getting worse and the need for federal government oversight has been exponentially growing for over 40 years. Oversight which has been put in the hands of other federal employees on the exact same payroll. We essentially have been letting the fox guard the henhouse. And, we wonder why it never gets any better. These feds have little incentive to expose what could ultimately end their career if they succeed in fixing the original problem. If one really ponders this, federal work is based entirely on failure, be it poverty, sickness, tax evasion or even internal federal corruption. Moreover, the perpetuity of that work demands that such failure continues. It is in the best interest of each and every federal worker that the United State remain in a perpetual state of failure and decline. It has gotten so bad that the cost of this oversight is also taking a significant toll on the national debt.

      Today, we get far less out of these institutions than in any time prior and we are spending through the roof for it. There are no more fixes. A strong federal government just does not work. Eventually we get to the time we just need to admit that we have failed and move on. The idea of a strong central government, as inviting as it can sound on paper, has failed all over history and today they are failing all over the globe as you read this. The thirst for power, privalege and wealth resides in us all and without checks and ballences, people will succeed on that persuit at the cost of others. Peolpe may have good intensions early on, but free metro rides or just one hotel discount for federal employees is all it takes to start the ball rolling. This is what the federal government has become.

      If there was any team that could have made the case for a strong central government it would have been both the Bush (“W”) and the Obama administrations. We have more government since that fateful day on September 11th then ever before and we have never been as weak economically and as a society and as we are today. A missile was shot off the coast of California and no one have any clue what it was. We lost our way and we are adrift. All because of the institution comprising most of the District of Columbia. We need to abandon this idea that a strong central government is necessary before it kills us. It is time.

    3. Brian, Pennslvania says:

      The numbers: In FY2009, the world spent 1.531 trillion dollars; the US spent 661 billion of that or 43% of the total. We spent more than then next 14 countries COMBINED! And we need to spend more?

      Why don't we ask the Pentagon what they WANT instead of letting Congress tell them what they think the Pentagon should have?

      Why don't we withdraw our troops from the vast majority of the countries that they are now in?

      Why don't we let those countries tax THEIR citizens for THEIR defense instead of letting the US taxpayer provide for their defense?

      Why don't we realize that our conflicts from this point forward will not be with major countries (Russia, China, etc.) but will instead be pissy-ass small countries (Iran, North Korea, etc.)? And we do not need to develop and pay for major offensive and defensive systems geared towards a time when we were in a cold war.

      Why don't we realize that "providing for the common defense" should mean the defense of THIS country and NOT the rest of the world? We simply can't afford it.

    4. Guy J. Thull says:

      We moved from relatively conservative Orange County CA to liberal Washington State. I am a retired RE Broker and now a volunteer for the Repubs on Whidbey Island. I consider it a personal challenge to try to educate the local masses about the progressive's attack on center right America. Thank God for The Heritage Foundation

    5. Jill, California says:

      From what analysts on Fox News were saying last night, it sounds as if the proposal is filled with sneaky maneuvers to take even more money from taxpayers. The only difference is which pocket the government is taking it from.

      If, for example, the government lowers the corporate business tax but increases taxes on fuel and other expenditures a business must make, the business owner is spending just as much, if not more, on keeping the business running.

      This has been Obama's modus operandi from the beginning. Don't call it a tax; call it a fine. In the words of Glenn Beck, "Watch the other hand." Obama will find any way possible to squeeze us into poverty.

    6. Colin, Maine says:

      The current level of defense spending is not a sacred cow. Starting from that point of view limits the discussion. I'm for strong defense and believe that it is the first priority of our federal government, but taking the position that there is no waste in the defense budget or that everything we are doing around the world is necessary for our defense… doesn't seem "defense"-ible.

    7. Dean House says:

      I was amazed that there would be any tax increases what so ever. I wonder how many of the committiee ever owned a business or how jobs are created.

      Dean House

    8. Evan, Anchorage says:

      With where we are right now, after being stupid for so long, we need to do everything possible to fix the budget problem. If everybody hates it, then it is probably the right thing to do. No way is anything going to get done with no tax increases, face realality. The new tax brackets for individuals and corporations actually look pretty good to me.

      We must start acting on this problem.

    9. Nolan, Athens says:

      Actually, it's a pretty sane and rational proposal. We will never get our house in order if we're not willing to trim sharply in the most expensive categories, which of course includes defense. Nor will we accomplish this with any speed unless we increase the flow of incoming tax dollars. It's simple math, folks, and either you're serious about paying down the debt or you're not.

    10. lbw6303 says:

      There's absolutely no doubt in my mind, that we could immediately just cut spending by 25% by mandating that every (yes I mean EVERY) federal agency take a budget cut of 25%. Believe me they can do it. Someone just has to tell them that they must. I Know, They'll all immediately march out the "Sacred cow" line items to rant and rationalize why they can't do it, but they can!!! If you've ever watched the budget process of gov't agencies, they always have several "authorized, but unfilled positions". This is their slush fund. The first reaction to the budget axe only has them agreeing to conform by not filling certain unfilled positions until the crisis passes. The positions never actually go away, they just go ubfilled. The very next year they will be right back trying to acquire a "management reserve" by trying to budget once again for the un-needed position. These cuts must be made!!!!!

    11. Ben C. Ann Arbor, MI says:

      I propose the committee run MY business for a little empathy training. How about the committee manage my cash flow, employees and liabilities to see what it is like in the real world. I told my banker "I have a tax to income ratio problem, not debt to income ratio problem." Its time we elected citizen legislators, not career legislators.

    12. Mark, North Carolina says:

      Comment for George Colgrove in Virginia: I think this is the first time I've seen a posted comment that's at least 3-4 times as long as the original article. My compliments to you, George, for a very thoughtful and well-written piece.

      In fact … I think The Heritage Foundation needs to make room for you as a staff writer.

    13. cindy sanford says:

      I will be checking back often to get the more detailed analysis you promise. But, even though I'm a conservative, I don't think any true deficit reduction will take place unless EVERY program endures cuts, including defense. As soon as we allow anyone to say, in effect, "cut this, but not that," all will do likewise. The entitlements are every bit as sacred to lefties as defense is to the right. There will be no resolution on this until everything is on the block.

    14. Andrew, VA says:

      Amen to what Ms. Sanford said. "Cut this, but not that" basically got us in this mess. It will not help us get out of it.

    15. Barbara Agler Ventur says:

      If you are going to stiff the middle class with a Social Security cut, how about asking the same kind of cuts for Congress and other administrative personel whose pensions far exceed the average Social Security beneficiary in % of salary earned, and who are not required to be Social Security contributors,Spread the pain more generously. Another Aha moment! Instead of cutting out the home mortgage deduction, which is probably one of the biggest tax breaks allowed the average middle class joe, how about eliminating some the the massive tax breaks and subsidies allowed Big Oil and other massive corporate breaks duly bought and paid for?

    16. Paul Schnake says:

      A correction should be made, but this deficit panel made some bad choices. Federal spending must be drastically reduced. I have prepared a comprehensive plan. If your interested in it please let me know. The plan very shortly is reduce all federal salaries including elected salaries. Freeze all federal expenditures except for defense of the continental US and it's territories. Fix social security, medicare and medicaid NOW. This includes removing these plans from the federal budget.

    17. William Moyer, Allen says:

      I read some of the panels recommendations and find them really non workable. Take a liberal Republican and put him with a liberal Democrat and you get exactly what was printed. I would suggest the Heritage Foundation put 5 average citizens in a room and tell them to come up with cuts and I will bet they do a better job then the nuts that wrote the report.

      First: Get rid of the Dept of Energy- Carter formed it and it has failed

      Second: We don't need a Dept of Education-Gone

      Third: All depertments budgets are zero based budgets from now on.

      Fourth: All employees hired since 2008 fired.

      Fifth: All government pay to be lowered to that of the general public.

      Sixth: All benifits to be similiar to industry,

      Seventh: Get rid of Dem care.

      Eighth: Flat tax after the abolishment of IRS.

      Ninth: TSA workers don't need top security clearences.

      Tenth: Get rid of TSA

      Eleventh: Reduce EPA budget to 2005 levels or lower.

      Twelveth: Business tax reduced to 25% maximum

      Can we add additional items on to this note? It is better then the DINOS and RINOS have come up with so far!!!!

    18. Michaelon Wright, Ju says:

      I think the defense budget could use a through evaluation. I know that millions/billions are wasted on programs and bases that are unnecessary. The first priority needs to be the support and well being of our deployed troops followed by state of the art defense of our nation. Programs need to be evaluated based on what they bring to the future of warfare and the defense of our nation and not on the revenue they bring to a congressman's district. Defense contractors make too much money and are not sufficiently scrutinized for efficiency. Perhaps the defense department should employ some ford motor purchasing agents, they really know how to squeeze their suppliers. Upper military personel and congressmen need to have the equivalent of a noncompete clause, where they can't go to work for companies they delt with while in government for a period of at minimum 5 years. I am sure the defense department is not using its funds wisely and efficiently and could do everything it needs to do on less revenue with money left over for the development of new technologies to keep our nation safe.

    19. Al Metcalf, Silverad says:

      If we really want to control the Federal Govt we have to do it by means of the State as we citizens do not have any actual control of policy or law. We do have absolute control of who we send to Congress and how many times we send each individual. We also have control of who can run for office and who cannot. Is anyone getting the message?

      If we want to change Washington DC, we must do it by oblique methods. The term of Senators and Representatives is set by the Constitution, but we, the citizens of the State, get to make the rules of who, how and when a person can run for office.

      If each State changes the State rules and limits the terms and make the rule that no incumbent or appointed government employee can run for elected office until they are a Unencumbered Citizen. And that no Person can hold elected office for more than sixteen years in a lifetime. Now we pretty much have the Career Bureaucrat out of business.

      Think about it. No consecutive terms. One day you are a Senator and then you are unemployed until the next Senate election. Or today Nancy is the Queen of the House and tomorrow she is out of work for at least two years. This is something that should happen in every State. I am a memeber of the TPP and am pushing this issue nationally.

      The existing budget crisis is of the making of the Liberal Democrats over the last 50 years. A systematic encroachment of public decay presented to the American people as "the right thing to do for a truly a civil society".

      All crap. When civil people take it into their heads to rob those individuals who are the producers under the guise of "civil society" then our society has lost it's mind. When the Sheriff can put a gun in your back and lift your wallet – it is theft, period.

      And when the Federal Govt robs you of your lifes energy so they can give your belongings to someone else, that is "involuntary servitude". And not only is it immoral but it is codified and against federal law. Does anyone want to join in a Federal Class Action Suilt against the Federal Government for Involuntary Servitude (Slavery)?

      Our Constitution actially charges the Federal Government with our Defense and Protection, nothing else. Read the Preamble it says it all.

      Foriegn Aid, Welfare with all of it s sub heading and the rest of the garbage is just more and bigger crats. We need none of it.

      Term Limits and a flat tax based on the last years spending solves many problems.

    20. Ken St Louis says:

      I'm getting kind of tired of having everyone call social security and ENTITLEMENT Thats our $, we paid it in, and then adding insult to injury we received no interest on it! Not to mention that its not there anyway! Its been spent as fast as it came in on anything and everything!!

      !

      Want to balance the budget? EASY just lay off 25% of the federal employees! At least that many of them don't work anyway!

      AND the federal rserve is NOT FEDERAL, AND THERE ARE NO RESERVES!

    21. Dr dbiggs,CA says:

      Pres OBOZO: "Tea Bagger-in-Chief"

      You Can LIE but can you READ?

      Invasion by illegal ie "Criminal Aliens"

      Obviously you have never read the United States Constitution or

      else feel that in your ivory tower and wealth that it does not apply to you!!

      I feel you need to read the following and act according to the peoples wish

      not your wishes or special interests wish list!

      There are three references to the words "invasions," "invaded," and

      "invasion" in our U.S. Constitution:

      Article I, Section 8: "The Congress shall have Power To Provide for calling

      forth the Militia to execute Laws of the Union, suppress

      insurrections and repel Invasions."

      Article I, Section 10:"No State shall, without the Consent of Congress, lay any

      Duty of Tonnage, keep Troops, or Ships of War in time

      of Peace, enter into any Agreement or Compact with

      another State, or with a foreign Power, or engage in War,

      unless actually invaded, or in such imminent Danger as

      will not admit of delay."

      Article IV, Section 4:"The United States shall guarantee to every State in the

      Union as Republican Form of Government, and shall

      protect each of them against invasion, and on

      Application of the Legislature, of of the Executive (when

      the Legislative cannot be convened) against domestic

      Violence."

      Your Oath of Office and sworn duties as referenced mean you must Act and

      put a Stop to the Invasion of all the Illegal immigrants we are experiencing.

      Our U.S. Constitution mandates that invasions shall be repelled by Congress.

      and that means the persons in the House of Representatives and the U.S.

      Senate. Our nation's sovereignty must be protected.

      How can you even stand in front of a mirror and even look yourself in the eyes

      knowing you are a "Bought & Paid Hoe" for special interests and the

      Democratic Party Hacks? Tell me I am wrong, please because I fear for the

      future of our country as you certainly don't care about the people or our

      country!!

      You go to the SAME PLACE for LYING as you do for STEALING!!

    22. Nada Webb New Port R says:

      I believe that if property values (most middle class's major asset) at least in our area are back to 2001 levels, (anyone want a 2 bedroom home for 35 k) that government spending , salaries, and staff should be set to the same levels instead of raising taxes, and imposing fees to keep the size of government the same.

      The "real estate boom" began at that time and we should reset spending levels back to that point not 2008 when the damage had already been done.

    23. Nada Webb New Port R says:

      All government agency budgets, departmental personel should be set back to 2001 budget limits. Most middle class assets(homes) values are back to that level or lower.

      IF we say that the housing boom was built on a house of cards, set government spending local and federal back to the point were the foundation was stable.

    24. Greg Wilson Jefferso says:

      Even if improvements are made until we get a balance budget amendment – we will get right back to this mess.

    25. Pingback: On the table for the Holidays, countless unwelcome ways to tighten our belts

    26. Andrew, Sarasota, FL says:

      While I am also critical of a lot in the Simpson/Bowles plan for cutting the deficit I find my own opinions largely divergent from most of the analysis here. Defense cuts to me seem perfectly reasonable as the return to American tax-payers for foreign military bases of which we have thousands is negligible if it even exists. The amount spent on high-tech weapons by the American people is ludicrous considering we get so little in return and actually suffer so much from the fruits of this industry. If instead we spent less by dismantling foreign bases and moving high-tech industries associated with defense to developing world class energy technologies and essential public infrastructure we would not only reduce cost and still save jobs but be investing in things which will actually have high returns for tax payers.

      Smarter investment in public health would also reduce the cost of health-care which Americans pay far more for and see much less of than almost any other Industrial society. This includes looking at agricultural subsidies and moving the government aid towards promoting healthier choices for low-income families. A better, smarter public health system would help reduce the cost of government health programs without the need to cut benefits.

      If the tax payers money was used to create real jobs (not through corporate subsidy but through real investment in domestic industry) then tax revenues would go up. If money was invested in things that will bring returns (bombs just blow up and make people angry, they don't have a good cost benefit ratio) then less money would be lost and more saved in the future. This creates a surplus which can be used to pay off debt. Cutting everything and keeping people out of work reduces tax revenue and further inhibits our ability to pay down the debt. It isn't something that can be handled overnight by simply cutting expenses. So, in this situation the hard thing to do is the right thing to do, but the hard thing is taking the long view and realizing that only by dealing directly with to out of control expenditures of our society through investment in the future can we expect to turn things around and reduce the debt. The view that the only way to deal with national debt is by cutting social benefits and government expenditures is myopic, ill-informed (that is if you care about the health of the society as a whole) and wrong-headed.

      I personally can see the appeal of these policies, especially when people are frustrated they seem like common sense solutions to what seems to be simple problems. But the real effect of these policies is rarely explored and the intellectual ground from which they originate is suspect. Just ask an Argentinean.

    27. Pingback: Obama Belatedly Engages on Budget with a Political Screed | The Foundry: Conservative Policy News.

    28. Wayne says:

      Tieing benefits to inflation sounds good. Eliminating waste is pretty much a requirement. That also includes the excessive costs of military contractors. The government should set the price, not the contractors. Also a leaner military is needed. Terrorists are not like an army. They require only special forces and intelligence to take them out, not blankets of bombs. However, unless the US business world participates in the recovery, the government will continue to be stressed to support it's unemployed citizenry. Because of that, the government will need to find revenues. That's simply how the math has to work out.

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