The Fiscal Commission Report

by Daniel Foster

Or rather, a draft of the “co-chairs’ proposal” (the final report will need the backing of 14 of 18 commissioners) is yours to read here.

From the report’s “highlights”

–Achieves nearly $4 trillion in deficit reduction through 2020: 50+ specific ways to cut outdated programs and strengthen competitiveness by making Washington cut and invest, not borrow and spend.

–Reduces the deficit to 2.2% of GDP by 2015, exceeding President’s goal of primary balance (about 3% of GDP).

–Reduces tax rates, abolishes the AMT, and cuts backdoor spending in the tax code.

–Caps revenue at or below 21% of GDP and gets spending down to 22% and eventually to 21%.

–Stabilizes debt by 2014 and reduces debt to 60% of GDP by 2024 and 40% by 2037.

–Ensures lasting Social Security solvency, prevents projected 22% cuts in 2037, reduces elderly poverty, and distributes burden fairly.

Part of that tax stuff is Wyden-Gregg-style reform, which would repeal the Alternative Minimum Tax and establish a simplified three-rate system (15, 25, 35 percent); triple standard deductions ($15k for individuals, $30k for families) while eliminating a number of itemized deductions; scale back the mortgage deduction and the charitable-giving deduction; and cap the employer tax benefit for health care at the value of the standard federal employee plan.

The Social Security reforms proposed include:

–Gradually phase in progressive changes to benefit formula by 2050

–Index retirement ages to life expectancy

–Gradually increase taxable maximum to 90% of covered earnings by 2050

–Apply refined cost of living measure (chained-CPI) to COLA

–Cover newly hired state and local workers after 2020

There is also a bunch of health-care spending stuff — letting the “Doc Fix” lapse and reducing reimbursement rates; comprehensive tort reform; shifting some costs in Medicare A and B to seniors; and (dun dun dun!) strengthening the “Independent Payment Advisory Board.”

And with that, I’ll leave the heavy lifting to the abler minds at the Corner.