2) Health reform's cost savings apparently were bogus. Remember how Democrats boasted that health reform would cut the budget deficit by $170 billion over the next decade and far more after that? The deficit commission must not have gotten that memo. It says health spending projections under the new law "count on large phantom savings" and the reform law's new long-term care program that the report calls "unsustainable." As a result, Congress will still need to enact "a number of other reforms to reduce federal health spending and slow the growth of health care costs more broadly."And next time you hear President Obama whining about all the spending that he inherited from the Bush administration as if he hasn't been adding way more, remember this detail.
5) Obama is a big spender. Although President Barack Obama has talked about fiscal discipline -- and set up this deficit commission -- his own budget plan would spend $350 billion more on so-called discretionary programs over the next decade than if the government were just left on autopilot, according to the report.So when Obama acts like he spent a lot the past two years just because of the emergency we were in, remember: he plans to keep up the trend.
This is the most encouraging bit of news from the report.
6) It's actually not that hard to cut the deficit. The report talks loudly about the "painful" choices ahead and how there's "no easy way out." But what the report really shows is that a comprehensive package of relatively modest and reasonable policy changes can bring deficits under control.Now, if only our politicians would have the same proclivity for truthfulness about spending that the Commission's leaders have demonstrated.
The tax reform plan, for example, is modeled on the reforms enacted under President Ronald Reagan, which also lowered and simplified income tax rates in exchange for cutting back on a thicket of tax loopholes. The Social Security reforms are all unexceptional and slowly phased in. The cuts in discretionary spending mainly just strip out the massive spending increases enacted over the past couple of years. Indeed, probably the toughest medicine in the plan is a 15 cent per gallon hike in the federal gas tax by 2015 -- which would cost an average driver about $100 a year.