On 18 February 2010, President Barack Obama signed a Presidential Executive Order establishing the National Commission on Fiscal Responsibility and Reform. The Commission was charged with “identifying policies to improve the fiscal situation in the medium term and to achieve fiscal sustainability over the long run.” According to the establishing order, the Commission was specifically charged with proposing “recommendations designed to balance the budget, excluding interest payments on the debt, by 2015…[and] that meaningfully improve the long-run fiscal outlook, including changes to address the growth of entitlement spending and the gap between the projected revenues and expenditures of the Federal Government.”

The 18-member Commission, which was co-chaired by former United States Senator Alan Simpson (R-WY) and Erskine Bowles, a Chief of Staff to President Clinton, released its final report, “Moment of Truth,” on 1 December 2010. The bipartisan Commission, which was selected by the President and the majority and minority leaders of the House and Senate, included the following members: Senator Max Baucus (D-MT); Representative Xavier Becerra (D-CA); Rep. Dave Camp (R-MI); Senator Tom Coburn (R-OK); Senator Kent Conrad (D-ND); David Cote, Chairman and CEO, Honeywell International; Senator Mike Crapo (R-ID); Senator Richard Durbin (D-IL); Ann Fudge, Former CEO, Young & Rubicam Brands; Senator Judd Gregg (R-NH); Rep. Jeb Hensarling (R-TX); Alice Rivlin, Senior Fellow, Brookings Institute and former Director, Office of Management and Budget; Rep. Paul Ryan (R-WI); Rep. Jan Schakowsky (D-IL); Rep. John Spratt (D-SC); and Andrew Stern, President, Service Employees International Union.

The 66-page plan, which was endorsed by 11 of 18 Commission members, was developed in the context of the following guiding principles and values:

  1. We all have a patriotic duty to make America better off tomorrow than it is today;
  2. Don’t disrupt the fragile economic recovery;
  3. Cut and invest to promote economic growth and keep America competitive;
  4. Protect the truly disadvantaged;
  5. Cut spending we cannot afford;
  6. Demand productivity and effectiveness from Washington;
  7. Reform and simplify the tax code;
  8. Don’t make promises we can’t keep;
  9. The problem is real, and the solution will be painful; and,
  10. Keep America sound over the long run.

Within this context, the report’s plan for discretionary spending starts bluntly: “Over the past decade, base discretionary spending (excluding war costs) has grown by 34 percent in inflation-adjusted dollars (64 percent in nominal dollars), and the President’s Fiscal Year 2011 budget projects it to grow by an additional 6 percent to $1.26 trillion in 2015. In order to bring down the deficit, Washington will have to rein in discretionary spending. Every aspect of the discretionary budget must be scrutinized, no agency can be off limits, and no program that spends too much or achieves too little can be spared. The federal government can and must adapt to the 21st century by transforming itself into a leaner and more efficient operation.”

As supporting evidence for the Commission’s recommendation to “cut-and-reinvest,” the Commission called attention to the fact that the “government funds more than 44 job training programs across nine different federal agencies, at least 20 programs at 12 agencies dedicated to the study of invasive species, and 105 programs meant to encourage participation in science, technology, education, and math. Many of these programs cannot demonstrate to Congress or taxpayers they are actually accomplishing their intended purpose.”

Other areas for action are not new or surprising and include tax reform, health care, Social Security, other mandatory spending program reform, and process-related efficiencies.

The complete report is available at http://www.fiscalcommission.gov/sites/fiscalcommission.gov/files/documents/TheMomentofTruth1212010.pdf.


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