Like rebellious teenagers, Washington politicians ignore advice until they get in trouble. The debt downgrade and market crash ought to get them to rethink their overspending ways. Within the week, a new task force will form to give them an opportunity to make amends.
Last week's disastrous debt-ceiling compromise created a Joint Select Committee on Deficit Reduction with the mission of finding up to $1.5 trillion in spending reductions or tax increases by Nov. 23. Congressional Republicans are hopeful about the panel's potential.
"Sen. McConnell believes that the committee should find real savings, significant savings," Senate Minority Leader Mitch McConnell's spokesman Donald Stewart told The Washington Times. "Clearly, the committee's work will be crucial," Michael Steel, spokesman to House Speaker John A. Boehner, told us.
The debt deal set triggers meant to encourage this committee to take real action. Democrats need to compromise, or else they'll see across-the-board slashing of their beloved social-welfare programs, including Medicare and Obamacare. If GOP members fail to agree, the automatic enforcement mechanism will take half of the cuts from defense.
On Monday, President Obama promised to send his "recommendations" to the committee for "modest adjustments" to Medicare. He has talked a lot about having a plan for entitlement reform, but he has never actually committed the details in writing. His fiddling around the edges won't make a dent.
The largest drivers of the nation's debt - Social Security and Medicare - must be tackled head-on to make a difference. Real savings would come from slowly shifting the health care program for seniors into vouchers or by adopting the premium support plan offered by Rep. Paul Ryan, Wisconsin Republican.
Social Security's eligibility age must also be raised before FDR's Ponzi scheme bankrupts the nation as the baby boomers live long in retirement. Political leaders know this, but too many of them care more about getting re-elected than about doing what is necessary.
The committee also must lower our corporate tax rate so it is competitive with the rest of the industrialized world. This would go far toward stabilizing the stock market and bringing needed investment into the dragging economy. If Democrats insist on closing tax loopholes, Republicans should insist that deductions are removed only in exchange for lowering overall marginal tax rates.
No matter what committee members do, the maximum $1.5 trillion in spending "cuts" over 10 years won't actually reduce the debt. That amount is the equivalent of three weeks' worth of annual government spending, and it's nowhere near the $4 trillion over 10 years that Standard & Poor's said was needed to avoid the downgrade. The committee and Congress must do a lot more.
Because the president and congressional leaders didn't have the willpower to cut even one full day's worth of 2012 government spending in the debt-ceiling deal, the chances aren't great that they will now agree to significant reforms. Still, if they realize their political futures depend on reversing course, perhaps there's room for a small bit of hope.
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