The National Economic Commission is pushing ahead with its work developing a plan to reduce the federal deficit, despite the possibility that it will be ignored by President-elect George Bush.
The commission is listening to a parade of public witnesses, most of whom warn of the economic dangers awaiting the country if the new Bush administration does not deal quickly with the deficit problem.More witnesses were to testify Wednesday, including House Speaker Jim Wright, D-Texas, and former Federal Reserve Chairman Paul Volcker.
But behind the scenes, commission members are anxiously awaiting word from the Bush camp on what role the new administration sees for the commission.
The first sign will be Bush's choice for the final two people to complete the 14-member advisory group. Supporters of the commission are hoping Bush will name pragmatists along the lines of Bush's choice as budget director, Richard Darman.
They believe that would be the best sign that Bush wants to use the panel, which was created by Congress, as a vehicle for crafting a compromise with Congress to end the seven-year stalemate over the budget deficit.
In an effort to reassure jittery financial markets, Bush has said that he sees attacking the deficit as his top priority but he has not provided any specifics on what he plans to do about it. He says he will name his administration's negotiators with Congress on his first day in office.
Various groups have weighed in with opinions on how Bush should attack the budget deficit, which last year climbed to $155.1 billion and is projected by many economists to hit $165 billion this year.
The Council on Competitiveness, composed of 157 chief executives from business, organized labor and higher education, was presenting the deficit commission with a list of proposals showing that the deficit could be trimmed by $120 billion by 1993 with a combination of $48 billion in spending reductions, $48 billion in new taxes and $24 billion in savings on interest payments on the national debt.
John D. Ong, chairman of B.F. Goodrich & Co. and the project leader for the council's report, said the executives were unable to come up with any credible deficit reduction plan that avoided increasing taxes, something Bush has pledged not to do.
"We determined that reducing the deficit on the spending side of the ledger alone could undermine national security and erode benefits for some of the nation's neediest citizens," Ong told reporters at a briefing Tuesday.
Among the higher taxes the council suggested were a boost in excise taxes on cigarettes and alcohol, which would raise $8 billion annually; a 20-cent-per-gallon increase in the gasoline tax, which would raise $20 billion annually, and higher income tax rates for families earning more than $220,350 a year, which could bring in $7 billion in additional revenues, the council said.