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Leaders of deficit commission release draft proposals

The final version isn't due for three more weeks, but the co-chairs of the National Commission on Fiscal Responsibility and Reform (i.e. the White House deficit commission) issued their preliminary recommendations yesterday — and the howls of protest have begun.

"There are things in there that I hate like the devil hates holy water," Democrat Sen. Richard Durbin (Illinois) fumed — despite the fact that he serves on the commission. Outgoing House Speaker Nancy Pelosi (D-Calif.) called the recommendations "simply unacceptable."

(At right are a two tables — prepared by the Wall Street Journal — listing many of the draft plan's suggestions that would cut $200 billion in spending in 2015.)

Half-way around the world, in South Korea, President Obama "urged leaders of his own Democratic Party to hold their fire over the recommendations," according to the WSJ. "Before anybody starts shooting down proposals, we need to listen, gather up all the facts, and be straight with the American people," he said.

You can get fuller details on the draft plan's recommendations here (PDF), but the Journal offers this summary:

[I]n its current form [the plan] would end or cap a wide range of breaks relied on by the middle class — including the deduction for home-mortgage interest. It would tax capital gains and dividends at the higher rates now levied on wage income. To compensate, one version of the plan would dramatically lower and simplify individual rates, to 9%, 15% and 24%.

For businesses, the controversial plan would significantly lower the corporate tax rate — from a current top rate of 35% to as low as 26% — but also eliminate a number of deductions....

Overall, the plan would hold down the growth of the federal debt by roughly $3.8 trillion by 2020, or about half of the $7.7 trillion by which the debt would have otherwise grown by that year, according to commission staff. The current national debt is about $13.7 trillion.

Other proposals include gradually raising retirement for full Social Security benefits to 68 by 2050 and 69 by 2075 and effectively cutting SS benefits for wealthier retirees by changing how benefits are taxes.

Always one for a colorful quote, commission co-chair Alan Simpson, a retired Republican senator from Wyoming, offered a metaphor that evoked Captain Ahab's quest for Moby Dick: "We have harpooned every whale in the ocean, and some of the minnows," he said.

Here are more details on early reaction, also from the WSJ:

Some conservatives, such as Grover Norquist of Americans for Tax Reform, castigated the recommendations as too heavy on tax increases and too light on spending cuts. But many Republicans held their fire.

"This is a provocative proposal, and while we have concerns with some of their specifics, we commend the co-chairs for advancing the debate. We will continue to work toward solutions that help spur economic growth and restrain the explosive growth of government spending," three House Republicans who serve on the commission, Reps. Dave Camp of Michigan, Paul Ryan of Wisconsin and Jeb Hensarling of Texas, said in a joint statement.

In contrast, Ms. Pelosi, other congressional Democrats, union leaders and liberal advocacy groups laid into the chairmen's conclusions, declaring them dead on arrival.

The WSJ notes that "[m]any of the plan's more provocative elements are intended as starting points for negotiation, not final recommendations." You can expect those negotiations to be boisterous.

The members of the deficit commission (most are members of Congress) are listed here.

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