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Financial Reform Commission Hints Tax Breaks in Play

Category: Economic Recovery, Seeding ProgressTags: , , ,

WASHINGTON - APRIL 27: U.S. President Barack Obama (C) speaks as co-chairs of the National Commission on Fiscal Responsibility and Reform Erskine Bowles (L) and Alan Simpson (R) listen in the Rose Garden of the White House April 27, 2010 in Washington, DC. Obama thanked members of the National Commission on Fiscal Responsibility and Reform for their service and spoke on the 'importance of forging bipartisan consensus around recommendations to meaningfully improve our long-run fiscal health.' (Photo by Alex Wong/Getty Images)

An article in the Wall Street Journal today says that members of the president’s deficit commission could consider eliminating some popular tax credits in their final commission report.

The panel, known as the National Commission on Fiscal Responsibility and Reform, must present recommendations to Congress by December 1 that would balance the budget, excluding interest payments on existing debt by 2015 and achieve long-term fiscal sustainability.  The committee reportedly will not begin voting on proposals until after the midterm elections.

On the table according to the paper are the mortgage interest credits and child tax credits, as well as the provision allowing employees to pay a portion of their health care costs with pretax money.  The White House estimates that each deduction could raise $1 trillion a year to cover the deficit, although commission members could recommend keeping each at a lower level.  The commission is also looking at recommended cuts in defense spending and freezing federal spending levels, but are not expected to produce concrete recommendations on long-term tax and entitlement issues.

The commission needs 14 of its 18 members to vote on a plan for it to be an official recommendation.  If no plan receives the requisite number of votes, there could be unofficial Republican and Democratic recommendations issued.