Commission's final deficit report preserves controversial spending cuts; panel to vote Friday on whether to endorse plan

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The Washington Post
By: Lori Montgomery
December 1, 2010

The leaders of President Obama's fiscal commission released a final report Wednesday that is full of political dynamite, including sharp cuts in military spending, a higher retirement age and tax reforms that could cost the average taxpayer an extra $1,700 a year.

But as commission co-chairmen Erskine Bowles and Alan K. Simpson unveiled the plan at a Capitol Hill hearing, it was unclear whether they would be able to build a convincing bipartisan consensus among the panel's members before they are scheduled to vote on it Friday.

The final plan to rebalance the federal budget would cut government spending even deeper than the commission's original proposal, while offering more help to some retirees. It offers an aggressive prescription for reducing deficits by nearly $4 trillion by the end of the decade.

The panel's 18 members - including a dozen sitting lawmakers from both parties - decided Tuesday that they would give themselves until Friday to review the document and decide whether to support it.

After two days of one-on-one meetings with their members, Bowles and Simpson acknowledged that it will be difficult to assemble the 14 votes that would allow them to issue official recommendations.

"Our goal in this whole process has been really simple. . . . To start an adult conversation here in Washington about the dangers of this debt and the deficits we are running," Bowles told reporters. "I don't know if we're going to get two votes or five votes or 10 votes or 14 votes. . . . But one thing is certain: The problem is real. The solutions are painful. And there are no easy choices."

Bowles, White House chief of staff in the Clinton administration, and Simpson, a former Republican senator from Wyoming, made that point clearly in their original blueprint, which they released just before Thanksgiving.

It called for sharp cuts in military and domestic spending, and the elimination of more than $1 trillion a year in popular tax breaks, such as the deduction for home mortgage interest and the tax-free treatment of employer-paid health insurance. The final report calls for the elimination or reduction of such loopholes.

The report released Wednesday preserved parts of the original blueprint that took aim at programs for the elderly - the biggest and fastest-growing category of federal spending - advocating higher Medicare premiums and smaller Social Security checks, particularly for the richest 50 percent of retirees.

The plan also calls for raising the retirement age to 69 for today's toddlers--a proposal that prompted an outcry from liberal lawmakers, organized labor and advocates for the elderly when it was included in the pre-Thanksgiving report.

In recent days, those groups have rolled out a series of competing deficit-reduction plans that would preserve the social safety net by targeting the military for deeper cuts and raising taxes for the wealthy. The latest, unveiled Tuesday by the Citizens' Commission on Jobs, Deficits and America's Economic Future, argues that deficits should be reduced only after the economy has fully recovered and unemployment has dropped below 5.5 percent.

Even then, the report says, "deficit reduction must be performed judiciously, without restricting government's ability to create jobs and without damaging needed social programs."

In deference to such concerns, Bowles and Simpson have strengthened protections for workers who might find it difficult to delay retirement, such as those in physically demanding careers such as nursing, according to the document. They have also made deeper cuts in discretionary spending to satisfy Republican demands.

Otherwise, the new plan looks much like the old one. "You'll recognize a lot of it," said Bruce Reed, the panel's executive director.

Despite a series of very late nights, the commission's exhausted staff has been unable to draft the plan in legislative form, Simpson said, meaning it would be impossible for Congress to stage a vote before the end of the year, even if 14 commission members agree to support it. Bowles has acknowledged that lawmakers are likely to pick it apart and tackle it in pieces, if they tackle it at all.

On Tuesday, the White House backed their decision to delay a final vote.

"The president established this bipartisan commission to tackle our medium and long-term fiscal situation, and we believe they are taking this mandate seriously and working together in a constructive way," White House spokeswoman Amy Brundage said. "We support the chairs' decision to slightly delay the vote to build consensus and ensure that members have the time they need to thoroughly consider all proposals."

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