The Deficit Commission Co-Chairs Report was released today and overall I would say it is an excellent starting point to getting back to fiscal sanity, complete with a breakdown of all savings/costs involved. The report makes some needed changes to social security (raises retirement age, changes cola, etc) that would bring it back to solvency, while at the same time not getting into any debate (that likely leads nowhere) on private accounts (even if these would be nice). The report also suggest some reforms to medicare that would shore up the solvency of that program as well. The commission found about $100 billion in (what I would consider) relatively easy to make defense cuts (none of which should jeopardize our ability to DEFEND ourselves and couples that with $100 billion in domestic discretionary cuts (although it counts $16 billion from eliminating earmarks, when in fact that money would likely still get spent, just not through earmarking).
In its best work, the report tackles the tax code in what I believe is an excellent reform by eliminating the AMT and all tax expenditures and using the bulk of that savings to lower rates across the board. Even after adding back in the child tax credit (which I am not sold on as necessary) and the EITC (which probably is necessary), we would still end up with brackets of 9%/15%/24% with a corporate rate of 26%. Those rates (which access a much broader base) should encourage increased economic activity and make the tax code infinitely simpler (also a money saver for anyone but accountants and H&R BlocK). The elimination of dubious incentives like the mortgage interest deduction goes a long way to winning my favor on this report.
Of course, the completeness and relative partisan-neutral design of this report means that it has little if any hope of being adopted, as I can see both parties (read as special interest groups that fund the parties) entrenching themselves with ideology instead of taking a facts based argument that at least gets us back to a much more sustainable fiscal picture that would benefit us all. I want to be clear in that while I personally do not agree with everything in the report, I would be more than willing to compromise in order to get back to a fiscally sustainable path (and then start fighting the battles again from strength).