President Obama offered his deficit-reduction recommendations to the congressional super committee on Monday, urging the panel to find both spending cuts and additional tax revenue to far exceed its assigned goal.
Obama put Medicare and Medicaid on the negotiating table, giving Democrats in Congress political cover to consider entitlement reform while putting pressure on Republicans to show more flexibility on taxes. Obama also urged lawmakers to press forward with long-term fiscal reforms even as they considered short-term initiatives to support the struggling economy.
While giving Obama credit for these constructive elements in his plan, Robert L. Bixby, executive director of The Concord Coalition, says in a blog posting that the administration’s proposals “fall short of comprehensive structural reform in health care and tax policy.”
The administration estimates their plan would produce a net deficit reduction of more than $3 trillion over the next decade. Obama threatened to veto any bill that changes Medicare benefits "but does not raise serious revenues by asking the wealthiest Americans or biggest corporations to pay their fair share."
While it is reasonable to suggest that the wealthy pay more than they have in recent years, Bixby writes, true tax reform would involve a much more comprehensive effort that would broaden the tax base, lower rates and significantly narrow the gap between government spending and revenue.
Last week the super committee received encouragement and solid advice from other members of Congress. The Blue Dog Coalition in the House sent the committee a letter on Wednesday urging “a balanced, bipartisan solution” that would cut the deficit by $4 trillion over 10 years. More than 30 senators from both parties sounded a similar theme in a press conference Thursday.
The budget projections that the super committee uses as its starting point will be critical, as Congressional Budget Office Director Douglas Elmendorf’‘s testimony before the panel last week made clear. If it is assumed that Congress will extend tax cuts and a number of other policies that are scheduled to expire under current law, for example, Elmendorf said the panel would need to find not $1.2 trillion but $6.2 trillion in deficit reduction over 10 years to reach the same level of debt relative to GDP (61 percent).