When you hear people talk deficit policy, you hear a lot about untouchable "third rail" programs. Social Security? Electric. Military spending? Hands off. Medicare? High voltage. Debt reduction is a railroad track made exclusively of third rails.
But Thursday, at a deficit policy event held by the Committee for a Responsible Federal Budget, one audience member asked a distinguished panel of budget experts and former electeds to identify the low-hanging fruit in budget reform. Jim Kolbe, a former Republican congressman, identified two: adding a gas tax and raising the Social Security full retirement age. Brookings fellow William Galston named another: eliminating some wasteful tax expenditures.
What do these ideas have in common? They're certainly not low-hanging fruit.
-- Gas tax? I'm quite sure that taxes on the middle class in a recession is chapter one, paragraph one of the book How to Lose Friends and Alienate People on Capitol Hill. It's fairly remarkable to hear a former Republican congressman call any tax a cinch.
-- The liberal Democratic caucus doesn't want to raise the retirement age by a single week, and I imagine the powerful AARP will have something to say about any Social Security cuts.
-- The term tax expenditures sounds complicated and oxy-moronic enough to be evil or unnecessary. But when you start to name the programs under that broad category, you find they're either mostly untouchable (employer health care tax subsidy), currently untouchable (mortgage interest tax deduction) or totally untouchable (Earned Income Tax Credit).
It seems to me the most reachable fruit is military spending and corporate tax rates. I'm defining reachable here as "issues that seem to have some bipartisan consensus." The Defense Secretary and a handful of Congressional Republicans have said they're open to consolidating the Pentagon's budget; and electeds from Judd Gregg to Nancy Pelosi have said that we should lower corporate tax rates and "broaden the base," which means kill some deductions and credits that corporate lobbyists have carved into law. As with the individual tax code, if we take away benefits for a select few, we can afford to cut rates for everybody else.
I don't know how the president's deficit commission will turn out, if it produces a workable document at all. But in the meantime, cutting defense as we draw back from the Middle East and cutting corporate tax rates as we look to galvanize American companies seem like two reasonable places to begin this long process of unwinding from trillion-dollar deficits and insurance against the crush of boomer retirement.
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