Dec. 1, 2013, is the three-year anniversary of the Report of the National Commission on Fiscal Responsibility and Reform, commonly known as the Bowles-Simpson Plan.
This plan to solve our federal debt problem detailed 10 changes to make Social Security sustainable for the next 75 years and beyond. It quantified how Social Security payments would change for each income bracket from the lowest (about three percent more) to the highest (about 20% less).
It replaced $1 trillion of tax deductions with a small number of provisions that promote work, home ownership, health care, charity and savings, and lowered tax rates. It detailed the effect on 12 major areas of taxation such as home mortgage interest and charitable giving. It quantified how the after tax income would change for each income bracket from the lowest (decrease by about two tenths of one percent) to the highest (decrease by about four percent).
The Commission members approved the Plan 11 to 7. But the Commission members who were also members of Congress voted against the Plan 6 to 5. The members of Congress have spent the last three years drafting (and not enacting) legislation that is even less acceptable to their political opposites than the Bowles-Simpson Plan while our federal debt problem has worsened.
If the Plan had been implemented three years ago our current projected federal debt held by the public would be $12.0 trillion; instead it is $12.3 trillion. Our 2020 projected federal debt would be $15.2 trillion; instead it is $16.3 trillion. The share for a family of four for this additional $1.1 trillion of debt is $15,000.
Our Congressional representatives have signed a pledge crafted by a professional lobbyist that essentially binds them from implementing the Bowles-Simpson Plan. They have pledged to never reduce anyones tax break and to never raise anyones tax rate. Even the modest after tax income reduction of four per cent for those of us in the highest income bracket is intolerable. Instead they have chosen political gridlock and an ever increasing debt burden.
And every time we re-elect them we make the same choice. Happy anniversary.