The Catfood Commission Issues Its Preliminary Report

The Deficit Reduction Commission, nicknamed the “Catfood Commission,” has issued an early report on its recommendations. As one would expect from a report where one of its authors called Social Security “a milk cow with 310 million tits”, it recommends reducing Social Security benefits to give tax breaks to big businesses and rich people. Also, they sneakily want to raise our taxes by taking away common tax breaks (like the mortgage deduction). They also want to fire a bunch of federal workers.

Their recommendations are more or less a list of the third-rail issues of American politics, including cuts in the number of federal workers; increasing the costs of participating in veterans and military health care systems; increasing the age of Social Security eligibility; and major cuts in defense and foreign policy spending. They also encompass a range of tax system reforms that have been floated by many in Washington for years to little effect, including funding tax rates reductions by eliminating many beloved credits and deductions.

I think this proposal is DOA and it’s still a preliminary proposal. Simpson and Bowles have to get 14 of 18 members of the committee to vote for it. Several have already said “not a chance.” Paul Krugman gives his reaction to the report:

OK, let’s say goodbye to the deficit commission. If you’re sincerely worried about the US fiscal future — and there’s good reason to be — you don’t propose a plan that involves large cuts in income taxes. Even if those cuts are offset by supposed elimination of tax breaks elsewhere, balancing the budget is hard enough without giving out a lot of goodies — goodies that fairly obviously, even without having the details, would go largely to the very affluent.

I mean, what’s this about? There is no — zero — evidence that income taxes at current rates are an important drag on growth.

Oh, and they’re talking about raising the retirement age, because people live longer — except that the people who really depend on Social Security, those in the bottom half of the distribution, aren’t living much longer. So you’re going to tell janitors to work until they’re 70 because lawyers are living longer than ever.

Still, I guess this is what it takes to get compromise, if by compromise you mean something the center-right and the hard right can agree on.

Krugman makes an important point about the retirement age. The increase in lifespan is mostly in the upper income brackets, not in the lower income brackets. They’re really saying work until you die. Krugman follows up:

I’ve referenced this before, but here’s the Social Security Administration study. Look at Table 4: since 1977, the life expectancy of male workers retiring at age 65 has risen 6 years in the top half of the income distribution, but only 1.3 years in the bottom half.

I guess I’m not getting too worked up about the report because I think it’s DOA. Obviously the right is not serious about deficit reduction. There are some interesting things in the report that the left can seize on if they’re smart, like support for the public option.

Growing Medicare and Medicaid costs are projected to contribute significantly to the federal deficit in future years, despite passage of a landmark healthcare reform bill that cut hundreds of billions from Medicare.

In their report, Bowles and Simpson urged Congress to set a global target for total federal health expenditures after 2020 and to review costs every two years to keep the growth of healthcare spending in line with the increase of gross domestic product plus 1 percent.

If costs exceed targets, the fiscal commission’s draft proposal would require the president to submit to Congress reforms such as the public option to lower spending.

The chairmen’s proposal calls for consideration of “a robust public option” among other reforms such as an overhaul of the fee-for-service system; an increase in healthcare premiums; a premium support system for Medicare; and strengthened authority for the Independent Payment Advisory Board (IPAB), which under current law will be empowered to restrict Medicare payments beginning in 2015.

I don’t know when Democrats are going to start hammering the right for their cynical deficit hypocrisy but this report is a good place to start. By advocating cutting Social Security by such a large amount to reduce the top tax bracket to 23% could it be more obvious? The right loves to scream “class warfare” any time someone suggests that the top tax brackets be raised. Isn’t obvious that there is a class warfare going on and 98% of us are losing?