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Political Survival 101: Listen to the Debt Commission regardless of consequences

After the drubbing that we Democrats took on Election Day, I, as im sure the Obama Administration, did some serious soul searching. Why such a huge defeat? What message where voters trying to send? What does this say about President Obama’s chances for re-election in 2012?

That final question is most important to me, and I decided to lay out certain steps that the Obama Administration can take to right the ship, and put themselves in much better shape going into the 2012 elections. Many feel that with the middle disappearing, bipartisanship is just about impossible. I beg to differ, and I feel that the president and his advisers can find a path to higher approval ratings…though it may be narrow. The first step is to tackle the debt.

The bipartisan debt commissison’s report that was announced a few weeks ago is definitely a game changer. The leaders of the commission are Erskine Bowles and Alan Simpson. Bowles served as the chief of staff to President Bill Clinton, and Simpson is the former Republican Senator from Wyoming. Bowles and Simpson decided to go public with a outline of the proposal that they have been working on to reduce the deficit. They went rogue and released this because they couldnt come to a consensus with the other 16 members of the commission on a way forward. I think that the other 16 members were reluctant to put their stamp of approval on this because many are current elected officials who have no courage to make the tough choices needed to bring down the deficit. Bowles and Simpson realized this, and released this drafted plan, if for any other reason to get debate started on how we can tackle this pressing issue.

This plan that Simpson and Bowles have come up with is a great start in my opinion. It mixes the perfect amount of tough/hard spending cuts along with proposals to raise revenue. The plan also:
-Will not start cuts until 2012, so as not to put too much pressure on a fragile economy
– Cuts defense, domestic discretionary, entitlement, and spending on the tax code
– Will bring spending down to 21% of GDP

Major Recommendations
– Proposing spending caps which will provide $200 billion in domestic/defense savings by 2015
– Ensure Social Security is solvent for the next 75 years
– Reducing the deficit by $4 trillion
– Cut the deficit significantly by 2015, and BALANCE the budget by 2037

The commission came up with $100 billion in defense cuts, and below are some of the ways they did this:
– Freezing salaries and bonuses
– Double defense contracting cuts
– Reduce overseas bases by 1/3

They were also able to shave $100 billion off the budget through domestic spending cuts:
– Freeze federal salaries and bonuses at non-defense agencies for 3 years
– Cut the federal workforce by 10%
– Slow the growth of foreign aid

Reforming the outdated tax code has been something many have talked about, but nobody has really taken head on. The commission came up with some very interesting ways to reform the code, and save the taxpayers and businesses money:
– Consolidate the tax code
– Eliminate all $1.1 trillion of tax expenditures
– Establish three rates: 15, 25, and 35
-Reduce corporate tax rate to 26%
– Raise gas tax by 15 cents by 2013, and use the funds to pay for transportation projects

And lastly, Social Security must be altered in order to assure it is stable for years to come. Its the third rail of politics, and many politicians are afraid to reform it…but now is the time for pol’s to get some backbone and get to work. Below are a few changes they propose:
– Raising the retirement age gradually to 68 by 2050, and 69 by 2075
– Broadening the payroll tax base by assuring that 90% of wages are captured by 2050
– Slightly reducing benefits for the wealthy.

Many of these cuts will be painful, and sure to cause interest groups on the left and right to attack them. I predict that the loudest critics will be on Obama’s left flank, because of the massive but necessary proposed cuts in entitlement spending. If Obama comes out and passionately supports most of these proposals, it will be music to the ears of moderates and independents. And secondly, many newly elected members of Congress and the Senate won their races by trumpeting their plans to drastically cut spending and reduce the deficit. This provides Obama an opening to possibly find the votes necessary on the opposite side of the aisle to get some of these spending cuts passed.

So what if the far left gets angry….Obama must remember that many on the left are disappointed yet and still, even after all he has accomplished in just two years. Also, he must remember that many Democratic members of congress and some in the senate have safe seats, regardless of if he wins re-election in 2012. Many are more concerned with their districts, and not what may be in the best interests of the ENTIRE country. Since he is the President of the UNITED STATES, he must govern accordingly. Its time for the President to stand up and do whats right, even if it means angering the base. His political future depends on it.

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