Last week, Alan Simpson and Erskine Bowles, chairmen of the National Commission on Fiscal Responsibility and Reform, released a proposal detailing a five-part plan to reduce the deficit. Although their proposal has well-intentioned ideas, it lacks some necessary steps needed to adequately address the federal deficit.
Many who read the proposal on fiscalcommission.gov will find something they dislike about it. Personally, I am wary of the many personal tax deductions, and some Democrats, like Nancy Pelosi, have voiced opposition against reduction in Medicare benefits while simultaneously increasing the age of retirement for Social Security. When the committee members meet in the coming week, they need to work together to properly address the growing federal deficit.
Former Sen. Simpson and under former president Bill Clinton chief-of-staff Bowles gave many options to cut the federal budget. Between defense cuts, federal employee pay-freezes and eliminating earmarks, the co-chairs estimate that their plan will reduce the budget by $200 billion in 2015. This is a positive step down the path toward reducing the size of our federal deficit.
However, these cuts might not be enough. According to economics professor emeritus Donald Hester, the co-chairs' proposed cuts will not adequately reduce the deficit. Instead, Hester suggests larger withdrawals from Iraq and Afghanistan, as well as drastic cuts to the military budget. Although the commission addresses cutting some defense spending, it does not go as far to account for the enormous costs of continuing our presence in Iraq and Afghanistan.
For these plans to get the start they need, the new House Republican majority needs to make a departure from past spending habits. The Republicans are now in a position to control Washington's spending, and they cannot revert to Bush-era fiscal policies. They need to lead by example by ending the use of earmarks and promoting budget cuts above and beyond those proposed by Simpson and Bowles.
But it is still important that Republicans be mindful of the cuts they pursue. The proposal suggests ""protecting"" education, research and infrastructure spending. Republicans would be wise to uphold these suggestions, as these three areas are vital components needed to keep America competitive in the global economy.
By continuing to invest in our infrastructure, the government will begin to address the infrastructure deficit. According to Hester, these types of funds are needed but remain unavailable to properly finance America's infrastructure initiatives. This puts the government in a bind, since they need to simultaneously cut the budget while continuing to invest billions in the infrastructure projects that America needs to support a thriving economy.
But simply cutting the budget is not going to save enough money to meaningfully reduce the deficit, so tax reform will be needed to bring in more revenue. The reform proposed by the co-chairs aims to increase revenue by simplifying the tax structure to a three-tiered system—closing loopholes in corporate accounting, among other strategies like reducing the number of tax deductions.
Republicans who generally oppose tax increases, like myself, may have to compromise on this issue to make any meaningful contribution to reducing the deficit. Taxes will have to increase, but any bill that comes out of the commission must clearly set aside a portion of the increased revenue for deficit reduction and infrastructure promotion. This is a tough pill to swallow, but it is important to ensure that American dollars stay in America and do not go toward interest payments to foreign nations.
The process of reducing the deficit is not going to be easy. The co-chairs of the National Commission on Fiscal Responsibility and Reform need to improve upon their current draft and give Americans a more sound option to reduce the deficit. This includes—and I hate to say this—raising taxes more than the proposed amount after the recession is over to properly fund infrastructure projects and pay off foreign debt. And this definitely includes withdrawing from Iraq and Afghanistan. These are not going to be easy proposals to promote, but they are necessary if Americans are serious about combating the problem of a growing deficit.
Matt Beaty is a sophomore majoring in mathematics and computer science. Please send all feedback to opinion@dailycardinal.com.
