Washington's Tax Hike Charade

Washington's tax hike charade

WashingtonExaminer.com

Its official name is the National Commission on Fiscal Responsibility and Reform, and its co-chairmen are veteran Washington insiders, former White House chief of staff Erskine Bowles and former Sen. Alan Simpson, R-Wyo. The panel's official purpose is "to propose recommendations designed to balance the budget, excluding interest payments on the debt, by 2015," according to the presidential executive order that created it. With a budget deficit of $1.4 trillion last year and approaching $1.6 trillion this year, balancing the federal budget is an urgent problem indeed, one made all the more serious by the coming retirement of the baby boomer generation that will drive federal entitlement expenditures sky high and a national debt equaling 90 percent or more of the nation's entire annual gross domestic product.

The conventional Washington wisdom is that there are only two ways to balance the budget and restore sanity to entitlements: Either raise taxes or cut federal spending across the board, including entitlement benefits. But nobody expects the present cast of characters in the White House and Congress to cut federal spending. Thus, only a modern Rip Van Winkle who is still snoring does not know that this panel's real political purpose is to prepare the way for a massive increase in federal taxation.

The commission hearings are all part of a familiar Washington charade in which concerned politicians, think tank experts and career bureaucrats profess their willingness to consider all possible solutions to a problem. The reality is there are only two reasons such commissions are ever created -- to appear to be "doing something" while actually delaying fixing a problem, or to create political cover for politicians and bureaucrats who have already decided on a solution that they know the public won't like.

It's already clear that taxes are going up because President Obama is allowing the Bush tax cuts to expire and because Obama's health care reform eliminates a huge swath of widely used medical deductions. What's more, Obamacare will drive federal health care spending to new heights, according to his own Department of Health and Human Services, which means spending cuts there are out of the question. So Washington politicians and bureaucrats are going to dig deeper into everybody's wallets.

That's why the commission's report is entirely predictable: Due Dec. 5, it will recommend higher tax rates (possibly called a "surtax" or some other misnomer), a variety of new federal "user fees" on things like energy, a European-style value-added tax, or some artfully named combination of all three. It won't recommend significant federal spending cuts. If we're wrong, we'll happily apologize to the commission.