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(WSJ) A 59-page proposal from the co-chairmen of the White House's deficit-reduction commission, which they labeled "The Moment of Truth," calls for sweeping changes in how the country spends money and collects taxes, the starting point for a long debate about how to tackle the U.S. debt.
Democrat Erskine Bowles and Republican Alan Simpson, who head the National Commission on Fiscal Responsibility and Reform, proposed in their final report changes that would affect almost everyone, from wage earners to people who put gasoline in their cars or hope one day to collect Social Security, Medicare, or Medicaid. It would cut 200,000 federal-government jobs by 2020, roughly 10% of the work force, and trim defense spending.
The proposals are likely to trigger widespread resistance from the interest groups that would be directly affected, such as seniors and home builders, but the panel's co-chairmen said the tough decisions must be made to put the country on a more fiscally sustainable path.
"Throughout our nation's history, Americans have found the courage to do right by our children's future. Deep down, every American knows we face a moment of truth once again," the co-chairmen's report said. "We cannot play games or put off hard choices any longer. Without regard to party, we have a patriotic duty to keep the promise of America to give our children and grandchildren a better life."The proposal would achieve nearly $4 trillion in deficit reduction through 2020, reduce the deficit to 2.3% of gross domestic product by 2015, overhaul the tax code, cap government revenue at 21% of GDP and reduce debt to 40% of GDP by 2035, the co-chairmen said.
The 18-member commission is set to discuss the proposal Wednesday morning and plans to hold a vote on it Friday. The chairmen are expected to come up short of the 14 votes needed to issue a formal recommendation to Congress and the White House, but the proposal is nevertheless expected to frame the debate in the next year over which budget changes are necessary to cut into the country's growing debt.
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