PD Editorial: Deficit plan

<p>If they accomplish nothing else, the co-chairmen of the president's deficit commission have exposed one of the great prevarications of American politics.</p><p>Balancing the federal budget isn't a simple as eliminating wasteful spending.</p><p>It's the truth that no one in Washington wants to admit, but restoring fiscal order will require sacrifices from everyone — popular programs must be cut, and taxes, never popular, must be increased.</p><p>The draft recommendations presented last week by Democrat Erskine Bowles, a former White House chief of staff, and Republican Alan Simpson, a former senator, include:</p><p>• Reducing cost-of-living increases for all federal programs, including Social Security. They also would reduce projected benefits and slowly raise the age for full benefits to 69. Retirement benefits also would be reduced for federal workers, civilian and military. </p><p>• Cutting $200 billion from the Pentagon and other federal agencies by 2015, including $3 billion a year from farm subsidies and tightening cost-cutting elements of the health care bill.</p><p>• Limiting or eliminating the mortgage-interest deduction, tax exemptions for employer-provided health insurance and the child care and earned-income tax credits. Rates would be raised for capital gains and dividends, and the inheritance tax would be restored for estates valued at more than $3.5 million.</p><p>Even if all these recommendations were adopted, the deficit, now $1.3 trillion, would still be $400 billion in 2015 — about the same as it was in 2004 — and the federal budget wouldn't be balanced until 2040.</p><p>Congress isn't obligated to accept the commission's plan, which is due Dec. 1, without amendment. We're not prepared to support all the proposals put forth by Bowles and Simpson. But they have produced an unusually candid assessment of what it will take to balance the federal budget. It recognizes that investments in infrastructure, health and technology can't stop, nor can Washington continue its current course, which the co-chairmen say would result in annual debt payments of $1 trillion by 2020.</p><p>Unfortunately, what we're hearing from Washington is more of the same — partisan carping about the sacrifices in the deficit plan while bidding up what appears to be a politically inevitable extension of the Bush tax cuts. Overlooked in that debate is the fact that even a $250,000 ceiling is a tax cut for all; there simply wouldn't be added benefits for higher incomes, at a steep cost to the federal treasury.</p><p>Creating a culture of fiscal discipline in Washington won't be easy. The blueprint presented by Bowles and Simpson offers the starting point for an honest debate. But are our elected officials ready to engage?</p>