Debt commission will look at good, bad ideas

WASHINGTON — The Democratic co-chairman of the bipartisan debt-reduction commission that President Obama created on Thursday said that "everything is on the table" — including raising taxes and cutting Medicare and Social Security — but declined to discuss his preferences or predict what proposals will prevail.

"Everything is everything," Erskine Bowles told McClatchy Newspapers. "I don't think you're going to be able to get there if you take anything off the table. We've got to look at good ideas, bad ideas and think about all of them."

Bowles, 64, is a former White House chief of staff under President Clinton and currently the president of the University of North Carolina system.

Obama also used the phrase "everything is on the table" as he signed an executive order Thursday to create the National Commission on Fiscal Responsibility and Reform. The 18-member commission is to make non-binding recommendations to Congress by Dec. 1, after November's midterm elections, on how to balance the federal budget — excluding interest on the national debt — by 2015.

The current pace of national debt risks financial calamity over the coming decade, economists warn. America is already dependent on loans from China and other countries to finance it. The federal budget deficit is expected to reach $1.56 trillion this year.

In addition, Medicare insolvency is projected in seven years. By 2015, the national debt is expected to near $14 trillion, or 72.9 percent of the GDP — enough to threaten future economic growth and erode U.S. living standards.

Republican congressional leaders reacted warily to Obama's commission, even as they prepared to appoint representatives to it, predicting that its Democratic majority would try to use it to raise taxes.

"Americans know our problem is not that we tax too little, but that Washington spends too much — that should be the focus of this commission," said Senate Minority Leader Mitch McConnell, R-Ky., in a statement.

Ten of the commission's 18 members are expected to be Democrats, but at least 14 members must approve the final report for it to be forwarded to Congress.

The debt-reduction commission's Republican co-chairman will be retired Sen. Alan Simpson of Wyoming.

Grover Norquist, the president of Americans for Tax Reform, an anti-tax group, said that, as a senator, Simpson twice helped broker major deficit-reduction deals that included tax increases. Norquist predicted that Democrats expect Simpson to do the same in this new role.