WASHINGTON -- The Bipartisan Commission on Entitlement and Tax Reform voted yesterday to send numerous options for overhauling the tax and entitlement system to President Clinton.
Although the commission was unable to reach an agreement on a specific plan, it voted 24 to 6 to send, along with the various plans, a list of three specific recommendations.
The proposals, which are not binding, emphasize finding long-term solutions to the nation's entitlement and tax problems.
In a letter to Clinton, the commission first recommended that Congress and the administration begin considering the long-term effects of major spending and tax decisions, because, it said, the current five-year budget window does not give lawmakers the whole economic picture. By long term, the commission means at least 10 years, but preferably 30 years.
The five-year economic picture looks good, but without some policy changes the Social Security system could be bankrupt in 30 years, said Sen. John Danforth, R-Mo., vice chairman of the commission.
Congress and the administration should take the opportunity to study the long-term economic effects of the various middle-class tax cuts that have been proposed in the past week, said the commission's chairman, Sen. Bob Kerrey, D-Neb.
When Congress considers changes in government revenues and outlays, it "can't just pick those things that win us a round of applause," like a tax cut, but must look to what that tax cut could mean for the long-term economic health of the country, Kerrey said.
The other specific recommendations the commission made included urging Clinton to work to balance the country's entitlement commitments with the funds available to honor these promises, and to educate people so they are able to participate in developing solutions to the impending problems.
The commission was successful in moving the debate on entitlement reform "from vague generalizations to the specific changes that are necessary," but Congress and the administration must build on the recommendations and implement the changes "sooner rather than later," Kerrey said.
Agreeing with Kerrey, Danforth said, "we have a generational obligation" to address these problems before it is too late.
During yesterday's meeting, many commission members stressed the importance of educating the American people on the changes that must be made to the tax and entitlement system if the country is to enjoy long-term economic health. The voters have two choices, Danforth said, adding they can either "face up to reality or remove reality as far from their sights as possible."
Federal outlays for Social Security, health care, and other entitlement programs are fixed by law, and account for 54% of all government outlays. The Congressional Budget Office estimates that unless some changes are made, entitlement outlays will grow to 63% of all federal spending by 2004.
Last week the commission's staff released a report detailing several options for controlling entitlement spending. The proposals included eliminating the federal tax deduction for state and local income taxes, reducing the maximum amount of mortgage interest that can be deducted, and eliminating the deductions for charitable contributions.
