Time for A Tax and Budget Reform Commission

Memo

To: White House

From: Centrist Policy Network

Subject: Bipartisan Tax and Budget Reform Commission

Date: 7/9/2003

Let us recommend the following structure for a National Bipartisan Commission on Tax Reform and Long-Term Fiscal Responsibility:

Co-Chairs:
One Republican, one Democrat, each on either House Ways and Means Committee or Senate Finance Committee. These co-chairs should be well-respected leaders on tax, entitlement, and budgetary matters, with a history of being able to work effectively in a bipartisan manner.

Four Additional Senators, appointed by Republican and Democratic Leaders.
(We recommend the chair and ranking members of the Finance and Budget Committees.)

Four Additional Representatives, appointed by Speaker and Minority Leader.
(We recommend the chair and ranking members of the Ways and Means and Budget Committees.)

Three Presidential Appointees:
Office of Management and Budget (OMB) Director
Treasury Secretary
Council of Economic Advisors (CEA) Chairman

Three Non-Voting, Non-Partisan Congressional Staffers:
Congressional Budget Office (CBO) Director
Joint Committee on Taxation (JCT) Director
Comptroller General (General Accounting Office GAO Director)

The Commission’s objective would be to develop a detailed budget and tax reform plan for the next 10 years (2005-2015), and a general plan for the following 10 years (2015-2025). That plan would include the following:

1. Personal income tax simplification
2. Corporate income tax overhaul
3. Balanced federal budget in 10 years under plausible political assumptions
4. Spending reduction recommendations
5. Entitlement reform recommendations
6. Recommendations for changes in budget process and long-term budgeting rules

The Commission would have an expert staff (in addition to assistance from CBO, JCT, and GAO) and would be required to report to the President and Congress within 10 months.

This Commission would be excellent political cover for President Bush on his most vulnerable issue: continued poor economic performance. The President could say: “Most of my attention on the economy has been devoted to preventing recession and spurring economic growth. However, now I am confident the economy is poised for a lasting recovery, and it is time to turn our attention to broader and longer-range measures to streamline and simplify the tax code, eliminate distortions that limit our economic potential, and set America on a firm economic foundation for the future.”

The public lacks confidence in President Bush’s current economic advisors and strategy. However, most people recognize tax cuts can help a struggling economy, and they continue to give the President the benefit of the doubt. As long as the economic situation is an emergency, and voters perceive that the President is taking emergency measures, the administration is fine.

Paradoxically, voters’ dissatisfaction with the President’s economic policies may rise if the economy continues to avoid recession, and the sense of economic emergency eases. If sluggish growth and economic uncertainty are as good as it gets -- if job growth and business opportunities and stock market gains are unsatisfactory in spite of economic recovery -- voters may reject Bush’s economic leadership and look for alternatives.

On the other hand, creating this Commission would show balanced leadership, deep concern for the future, and a desire for sound, long-term policymaking.

We encourage the administration to work with Congress to get this Commission launched this fall, and set-up for high-profile deliberations next winter and spring.

Links:
Text of Voinovich Fundamental Tax Reform Commission Proposal

Posted by Jeff Lemieux at July 9, 2003 11:24 AM