Deficit commission: four reasons it could fail
The members of President Obama's bipartisan fiscal commission agree on one big thing: The problem of runaway deficits and public debt requires urgent attention. Democrats and Republicans on the panel even seem to have moved toward consensus on some of the policy responses to the problem. But getting to "yes" on a plan to stabilize the national debt still faces big hurdles. Here are four of big areas of disagreement.
1. When are taxes too high?
Commission members of both parties have praised the idea of tax reform that makes the system simpler and avoids big tax-rate hikes.
Under the plan crafted by commission co-chairs Erskine Bowles (D) and Alan Simpson (R), this kind of tax reform, coupled with an increase of 15 cents per gallon in the gasoline tax, would also be used as a tool to reduce deficits. The plan would bring in nearly $1 trillion more revenue than the current baseline, over the next decade.
This dollar figure could be a stumbling block to any deal in Congress. Some Democrats think tax-revenue increases should shoulder even more of the deficit-reduction burden. (The commission plan would cut federal deficits by nearly $4 trillion over a decade). Republicans have the opposite concern, worrying that new tax revenue will end up going to new spending rather than deficit reduction.