One Cheer for the Catfood Commission

Paul Krugman has already dismissed the Deficit Commission's findings. Congressional Democrats have already denounced its recommendations. President Obama has called the recommendations a starting point for discussions.

It reminds me alot of the Grace Commission under Ronald Reagan created to study areas where one can eliminate government waste.

The Commission wants to reduce the size of the federal government by 250,000. It points to the massive increase in the number of contractors and employees during the Bush years. It also want to cap the number of federal political appointees to 2,000. They propose reducing unnecessary government printing, travel and the purchase of government vehicles. It plans to cut the budgets of Congress and the White House by 15%. And they want to freeze federal salaries for three years since everyone employed by the private sector, except for the very wealthy, is having their salaries cut.

The Commission wants to slow the growth of foreign aid, which is slated by the Obama Administration to increase by $14 billion over the next three years. The Commission wants to cut about $4.6 billion from the President's budget. It also wants to put a fence around diplomatic costs. It wants to reduce voluntary contributions to the United Nations. It also wants to eliminate OPIC, which insures overseas investments by American corporations.

The Commission proposes to eliminate alot of programs, which it claims are either ineffective or redundant. It also wants to sell off some of the federal government's 1.2 million buildings and some of its land parcels. Fees are to be charged to the Smithsonian and increased for the National Park System. It would also eliminate all funding for the Corporation for Public Brodcasting and NPR. The Commission urges the government to reduce the acquisition of land under the Land and water cinservation Fund.

So far, it's a pretty mixed picture. But the Commission does weigh in on reducing the cost of the Defense Department. It endorses Gates' promise to reduce Pentagon overhead by $100 billion by 2015. The Commission provides a long analysis of the problems of financial management and audits at the Pentagon,suggesting billions more could be saved. The Commission wants to freeze all civilian salaries at the Pentagon, freeze non-combat military pay at 2011 levels for 3 years and double Secretary Gates' cuts to defense contracting, which would save another $5 billion a year. The Commission suggests reducing procurement by 15% for a savings of $20 billion in 2015. It has called for the end of the V-22 Osprey, the Expeditionary Fighting Vehicle and cancelling the F-35 buys for the Air Force, Navy and Marines. The Commission calls for cancelling the Navy's Future Maritime Prepositioning Force, the New Joint Light Tactical Vehicle, the Ground Combat Vehicle and the Joint Tactical radio. The Commission wants to reduce the number of military personnel at overseas bases by one-third.

The Commission also addressed the entitlement programs of the military's retirees. Military health care went from $17.5 billion in 2000 to $47.4 billion in 2010 and will double by 2020. Calls to reform TRICARE have met resistance by Congress. Retirees and their dependents make up 57% of the beneficiaries and 65% of the cost of these programs. (Many of your teabaggers benefit from this program.) Reforming the whole Tricare system would save nearly $6 billion a year.

The Commission also wants to replace military personnel performing commercial activities with civilians. It is estimated that 88,000 military personnel are performing such jobs. This would save another $5 billion a year.

The Commission wants to reduce spending on base support, facilities maintenance, consolidate the retail activities (PX) and integrate children into local schools in the United States. That's another $5 billion a year.

The Commission also wants to adjust the income tax rates. You will hear alot of screaming how the Commission favors the wealthy with a sharp reduction in the highest tax rates. But its recommendation calls for eliminating tax deductions so that in real terms the wealthier would be paying more than they do now. Also the so-called cuts to Social Security mean any COLA adjustments would be pegged to inflation. The most controversial would be an increase in the retirement age around 2020 linked to life expectancy. I'm willing to bet you our life expectancy will drop not rise. They also propose significantly cutting Medicare through waste and other ideas. These suggestions are the red flags for the political world.

But for my view the Commission deserves at least some credit for spelling out over $100 billion cuts in defense spending, which Congress would never touch. At least these cuts are now in the public to be debated. To me these are the real Third Rails in politics. I thought they were too tame on the whole base closure issue. They opted to be more cost efficient rather than to raise the question of why we need over 800 bases abroad.

The other aspect of the Commission's recommendations concern the reduction of corporate taxes. This issue needs to be de-politicized since reform of the 2,000-page corporate tax code needs reform. While people will make politics by decrying calls for lowering the tax rates, it's important to be aware that only 26% of American corporations actually pay any tax at all. What we want is for more companies to pay taxes at regular intervals and in predictable amounts.

The recommendations of the Catfood Commission are the products of conservative Republicans and Third Way Democrats, who have not integrated the reality of our depressed economy into their thinking and into their reality. It marries Reagan's Grace Commission with Al Gore's Re-Inventing Government project under Clinton. It has the psoitives and negatives of both.

So One Cheer!