Select committee

Our congressional leaders have once again passed the buck to a committee. They are afraid to make the tough decisions that we expect from our elected officials so they have chosen the time worn practice of pushing things off to a committee. There will be 12 members, six from each party and six from each house. They are assigned the task of reducing spending by 1.5 trillion. If they fail to come up with a plan then the deductions will come automatically and half must come from defense and half from discretionary spending. This opens an opportunity for an agreement. The Republicans fear increases in the top tax rate which is currently 35% for individuals and corporations. The Democrats fear cuts in Entitlements like Medicare and Social Security.
The two parties could agree to lower the tax rate to 25% and close many of the deductions that have been introduced by various self interest groups. This would help business compete in the world market but it would cost individuals whose income is considered upper middle class, that is, the 50% of people who pay income tax. Typical is the deduction for home mortgage interest, deductions for health insurance premiums and charitable deductions. These people would pay more income tax than they now pay. Next they could agree to make changes to Medicare. The cost could be income based, that is, the higher income people would pay more. This is currently the case but the highest cost is only $400 per month and this would be much higher, perhaps as high as several thousands. They could also agree to phase in an increase in the age of eligibility to 67.
This would be a tough sell to the rank and file democrats since they are planning on winning the house back in the next election through demagoguery. When Paul Ryan came out with the Republican backed plan to revise Medicare the Democrats jumped on that saying that this would take Medicare away from Grandma and this was going to be their ticket to winning. To give that up will be giving up the chance to retake the house.
This is a tough sell for Republicans since it will be seen as a tax increase, even though the tax rates are lowered, many of the newly elected Republicans are opposed to any tax increase.
Even if the committee comes up with a plan it must go to the congress for an up or down vote and that could be tough and the President can veto the final vote. If they put the Medicare changes in the plan the house can pass it since they have a majority and that is where the big objection lies. Nancy Pelosi has said that bad mouthing the Republican plan to change Medicare is her path to the Speakership. If it passed the Senate and it is sent to the President he will through Pelosi under the bus if he does not veto the plan. If he veto’s he risks his reelection and if he doesn’t he risks losing the house. I believe if it comes down to a choice between his getting a second term and Pelosi regaining control of the house he will dump her.