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–Achieves nearly $4 trillion in deficit reduction through 2020: 50+ specific ways to cut outdated programs and strengthen competitiveness by making Washington cut and invest, not borrow and spend.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

The Corner

The one and only.