Final Debt Commission Report Awaits Approval From Panel

A final proposal put forth today by the 18-member commission created by President Obama earlier this year would reduce the nation’s debt by nearly $4 trillion over the next decade. The final draft is only a slight departure from a preliminary report released two weeks ago by the commission’s two co-chairman, Erskine Bowles and Alan Simpson.

The 60-page document, entitled, “The Moment of Truth,” focuses mainly on discretionary spending cuts and tax increases as a means of bringing down the country’s debt as a percentage of GDP to under 40% by 2040. It also proposes restructuring individual and corporate tax rates, and reforming entitlement programs such as Medicare, Medicaid and Social Security in order to make them sustainable in the long run.

The final proposal was met with both acceptance and scorn by members of the commission. Senate Budget Committee Chairman Kent Conrad (D-N.D.) said he would vote to approve it due to the lack of a more viable alternative.

“I don’t like everything in this package, but I like even less where our country is headed without it.”

Conrad’s counterpart on the Budget committee, retiring Republican Judd Gregg (N.H.) also said he would vote for it, despite having qualms with certain provisions.

“While I do not agree with all parts of the co-chairmen’s final proposal,” I will support it because it represents a step forward that we urgently need.”

Like the initial chairmen’s mark released earlier this month, the final report proposes $200 billion worth of cuts to both security and non-security discretionary spending levels by 2020. It suggests raising the age of qualification for Social Security benefits to 68 by 2050, and proposes replacing the current system by which physicians are reimbursed under Medicare.

Under the plan, federal employees would see their pay and benefits frozen for three years, an increase over Obama’s two year proposal.

On the issue of taxes, the report includes a provision that would repeal the Alternative Minimum Tax and establish lower rates for all indidivuals. The proposal would also bring down the nation’s corporate tax rate to a maximum of 28%. To offset those costs, the number of tax expenditures, or deductions available to top income earners would be entirely eliminated.

If Bowles and Simpson can muster 14 votes approving the report, it will likely be voted on by at least one chamber of Congress. Senate Majority Leader Harry Reid (D-Nev.) said he would bring the package to the floor should it receive the blessing of a majority on the commission. Incoming House Speaker John Boehner (R-Ohio) has not indicated whether he’ll follow suit when the GOP takes control of the House in January, but might refrain from doing so if commission members and fellow House Republicans Paul Ryan (Wis.), Jeb Hensarling (Texas) and Dave Camp (Mich) each vote against it.

Camp, the top Republican on the Ways and Means Committee, skipped today’s hearing to instead attend a meeting with Treasury Secretary Tim Geithner and White House OMB Director Jack Lew to negotiate an agreement on the expiring Bush era tax cuts.

While a handful of members were non-commital on Wedneday, outside groups were pressuring them to oppose the recommendations.

“This plan ignores the need for immediate public investments to spur job creation, relies too heavily on discretionary spending cuts, and slashes Social Security at a time when fewer Americans can count on a secure retirement,” said the group Demos in a statement. “The Commission’s recommendations would guarantee that America’s greatest days our behind us.”