Deficit Commission Draft

Oddly enough, I was planning to write a blog for today that focused on where you – the reader – would think about making cuts in the federal budget.  Then the story became much more real.

That was when the bipartisan federal deficit commission set up by President Obama issued a draft set of ideas on how to get rid of some of the red ink in the budget.

So let’s go through some of the ideas:

* Reduce Congressional & White House budgets by 15 percent – saving $800 million
* Freeze federal salaries, bonuses, and other compensation at non-defense agencies – $42 billion
* Cut the federal workforce by 10 percent – $13.2 billion
* Eliminate 250,000 non-defense service and staff augmentee contractors – $18.4 billion
* Eliminate all earmarks – $16 billion
* Eliminate funding for commercial spaceflight – $1.2 billion
* Eliminate grants to large and medium-sized hub airports – $1.2 billion

Some of them probably make sense to you right away – but as you can see – most of these aren’t truly “big ticket” items.

It’s a reminder of how difficult it is to actually cut the budget.

The plan also focused on savings of $100 billion in the Pentagon as well.

* Three year salary freeze for civilian workers in the military – $5.3 billion
* Freeze non-combat military pay levels for three years – $9.2 billion
* End purchases of the V-22 Osprey
* Cut by half the planned purchases of the F-35 Joint Strike Fighter
* Reduce overseas deployments by one-third – $8.5 billion
* Modernize the DOD Tricare health system – $6 billion

That last one is controversial because it would authorize an increase in premiums and co-pays; much the same would happen by establishing co-pays at VA Medical facilities.

The plan would also get into the politically touchy areas of Social Security and Medicare, by lowering the yearly Cost-Of-Living-Adjustment for Social Security and by raising the retirement age in forty years.

The really interesting part about the surprise drop of this report was the reaction from Democrats, most of whom had steam coming out of their ears.

“This proposal is simply unacceptable,” said Speaker Nancy Pelosi, who led the Democratic Party charge against it.  

“The Deficit Commission Co-Chairs’ plan to cut Social Security and Medicare is dead on arrival,” said Rep. John Conyers (D-MI), the outgoing Chair of the House Judiciary Committee.

Also outraged, liberal groups like MoveOn.org.

“If we want to get serious about the deficit, we need to get the economy growing again, and make sure the richest 2% of Americans pay their fair share,” said an email from the group. “Instead, this plan cuts taxes for the rich and corporations substantially.”

The evaluation was a bit different from one of the few Blue Dogs left in the Congress, Rep. Jim Cooper (D-TN), who said it is ‘put up or shut up’ time about the deficit..

“It is bitter medicine, but it could restore our fiscal health,” said Cooper in a statement.

“Congress should vote on this proposal and on any alternative measure that achieves the same deficit reduction. Every day we wait worsens our debt,” Cooper added.

On the GOP side, the spending cuts detailed in the plan were readily embraced by Republicans, but they balked at the idea of tax increases in the plan, as both sides had the natural partisan-type reaction to the draft.

But one has to wonder if the negative outcry from most Democrats presents Republicans with a better opening in terms of politics.

Republicans just rode a great wave of voter anger into office this year over the level of spending and debt.  Now, Democrats are savaging the fiscal commission and want this draft product killed off immediately, mainly because of the budget cuts involved.

If the GOP can stomach some of the choices, which might include some revenue raising options, they have the chance to marginalize Democrats even more when it comes to cutting the budget and dealing with fiscal matters.

We’ll see how Republicans play their cards.  This is not an easy issue because so many people will oppose specific items along the way.