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Debt Commission Surprises

Yuval Levin writes of the preliminary debt commission report:

If this is the Obama administration’s starting position in the conversation about deficit and debt reduction, it will be a serious position and a constructive conversation. They will obviously need to be willing to move rightward on some key issues (especially the entire health-care question, which is the report’s most glaring and serious weakness, and is at the heart of our crisis of public finances). But on social security, discretionary spending, and many of the proposed tax reforms, this is a very good start.

I would add a few thoughts. If Obama embraces it, this would be a meaningful reach to pick up independent voters’ support. They are among the most aggrieved by the fiscal train wreck (which Obama has worsened). But the president has a problem: his left flank has already rebelled. (The hysterical reaction by Nancy Pelosi tells you there are some really good things in the proposal.) So can Obama risk alienating what shriveled part of the base he still has? At some point, the threat, however remote, of a primary challenge begins to affect these decisions.

Second, it is quite extraordinary that the plan puts forth a credible version of tax reform. Did you expect the commission to come forward with a reduction in the corporate tax rate and a top individual rate of 24 percent? I sure didn’t. This represents a fundamental shift for Democrats, at least those on the panel who embraced the essential principles of the Reagan and Bush tax cuts. But, you say, what about the changes to the home mortgage deduction? We’ll have to do the math, but with a drastic reduction in individual rates, they may be “worth it.” And, bluntly, it would also cause people to more closely examine how much house they can afford. (If you trust the market, once the subsidy goes away, demand would lessen and prices should come down, making housing somewhat more affordable.)

And finally, we need to be clear-eyed about the defense cuts. We are fighting a global war on terrorism, may find ourselves embroiled in a military confrontation with Iran, and must continue to build missile defense systems. The cuts have to be assessed in light of our security needs and the threats we face. Republicans who embrace a robust, internationalist foreign policy should be wary.

In sum, I’m mildly shocked it was as good as it was. Conservatives would do well to embrace the chunks of it they can and offer plausible alternatives to the rest (e.g., repealing ObamaCare, for starters).



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