Deficit Reduction Commission Created by President Obama

President Obama issued an executive order Feb. 18, creating a Deficit Reduction Commission. The President has charged the Commission to report to Congress by December 1, 2010.

President Obama has appointed former Clinton White House chief of staff, Erskine Bowles, and former Wyoming Senator Alan Simpson to co chair the Commission. The Commission is slated to have 18 members, 12 appointed by Congress and 6 White House appointees. Congressional appointees are to be equally divided between the parties and the two chambers of Congress.

So far, only Senate Democrats have appointed its representatives to the Commission. They are: Sens. Richard Durbin (IL), Max Baucus (MT) and Kent Conrad (ND). The White House is slated to appoint 4 more members (besides the co-chairs)—one of whom must be a Republican.

Salient features of the Commission include:

• The commission will be asked to recommend deficit reduction proposals to bring the deficit down by approximately $500 billion per year within five years. The target will be pegged to a percentage of gross domestic product (GDP).
• Spending, taxes, and entitlements are all within the scope of the commission’s jurisdiction.
• Despite widespread support at the White House and in Congress for long-term and retirement savings, life insurance, annuity, pension and employer-provided benefit tax rules are likely to be at least considered as the commission undertakes its work.
• Fourteen members of the commission must support any recommendations the commission sends to Congress.

The commission’s scope of inquiry is not expected to be limited—i.e., proposals affecting spending, taxes and entitlements are all likely to be fair game for commission recommendations.

NAIFA Staff Contact: Michael Kerley, Senior Vice President – Federal Government Relations, at (703) 770-8155; or Dani Kehoe, NAIFA Outside Counsel.