Deficit Reduction Commission Takes Shape
The American public is going to hear a lot about budget deficits from official Washington between now and November’s elections. To kick off the start of “deficit reduction season” President Obama issued an executive order Feb. 18, creating what official Washington calls the “deficit reduction commission”—officially known as the National Commission on Fiscal Responsibility and Reform. Reducing federal budget deficits is a move NAIFA members would likely support. But doing so poses major risks to the favorable tax treatment that 75 million American families enjoy who use life insurance industry products for their financial security.
The Commission has been tasked by President Obama (and tacitly by the leaders of the House and Senate) with recommending a deficit reduction plan that will cut the federal operating budget deficit (but not the national debt) by $500 billion per year for five years.
The Commission’s charge includes examining all spending, tax policy, and entitlement programs including Social Security and Medicare. The Commission will hold its first meeting April 27, 2010, and must render its report and recommendations to President Obama and Congress by December 1, 2010.
A total of 18 members of the Commission have been appointed—three each from the Democratic and Republican sides of the House and Senate (for a total of 12) and six members by President Obama. House and Senate leaders have publically promised the House and Senate members they appointed that each house will have a floor vote during a Lame Duck session of Congress this year on any proposal that the Commission recommends for action. It should be noted that any Lame Duck session held after December 1 will come after the November midterm Congressional elections.
Cynics believe that the way that the Commission is structured will make it very difficult to garner the support necessary to make a recommendation. It will take agreement from 14 Commissioners to pass on a recommendation to Congress for action. Given the party and philosophical make-up of the Commission members, the chances of creating a meaningful proposal garnering 14 votes is considered a stiff uphill task. But, many ideas considered by the Commission that gain only minority support could gain traction in Congress in 2011—after the November elections reshuffle the Congressional deck.
NAIFA Staff Contact: Michael Kerley, Senior Vice President – Federal Government Relations, at (703) 770-8155.
