Sen. Bob Corker’s Fiscal Cliff Agenda
Sen. Bob Corker (R-TN) has outlined a debt reduction proposal in a Washington Post op-ed that certainly very attractive:
I have shared with House and Senate leaders as well as the White House a 242-page bill that, along with other agreed-upon cuts that are to be enacted, would produce $4.5 trillion in fiscal reforms and replace sequestration. While I know this bill can be improved, it shows clearly that we can do what is necessary, today, with relatively simple legislation. The proposal includes pro-growth federal tax reform, which generates more static revenue — mostly from very high-income Americans — by capping federal deductions at $50,000 without raising tax rates. It mandates common-sense reforms to the federal workforce, which will help bring its compensation in line with private-sector benefits, and implements a chained consumer price index across the government, a more accurate indicator of inflation. It also includes comprehensive Medicare reform that keeps in place fee-for-service Medicare without capping growth, competing side by side with private options that seniors can choose instead if they wish. Coupled with gradual age increases within Medicare and Social Security; the introduction of means testing; increasing premiums ever so slightly for those making more than $50,000 a year in retirement; and ending a massive “bed tax” gimmick the states use in Medicaid to bilk the federal government of billions, this reform would put our country on firmer financial footing and begin to vanquish our long-term deficit.
I look forward to seeing the details. But for now, I think that this is a solid negotiating position for congressional Republicans. It is not ideal, i.e., a deduction cap is a crude way to reform tax expenditures, and Republicans ought to make an affirmative case for expanding the child tax credit. But Corker has outlined a number of smart, politically viable entitlement reform ideas, and it is essential that any tax compromise be tied to structural entitlement reform.