AARP Bulletin - December 2010

; Your World
reaction if it were just a consistent ‘no’ message,” Rother said.
Here are several critical issues facing the divided government:
The deficit and jobs. Voters said their major concerns were the $1.3
trillion budget deficit (along with the cumulative $13.7 trillion national
debt) and jobs. Deficit panels, including one created by the president, are
o;ering lawmakers an array of options.
Two leaders of the president’s deficit com-
mission, former senator Alan Simpson and
former White House Chief of Sta; Erskine
Bowles, pulled no punches with their pro-
posals: Cut defense spending by $100 bil-
lion, gradually raise the Social Security full
retirement age from 67 to 69, raise gasoline
taxes 15 cents, lower the corporate tax rate
to 26 percent, limit deductions for home
mortgage interest, cut farm subsidies and
trim the federal workforce by 10 percent.
That’s a tall order. “We have harpooned every whale in the ocean
and some of the minnows,” Simpson said. Initial reaction from politi-
cians and special-interest groups, including AARP, was almost uni-
versally critical.
Eugene Steuerle, a fellow at the Urban Institute and former Trea-
sury o;cial, said both parties have for years spent more than the
country takes in. But now voters are forcing the issue. Next year, he
said, the government will spend about $30,000 per household and
take in about $20,000 in taxes. “No matter what they do, it’s going
to be painful politically,” Steuerle said. “The political dilemma is
telling the middle class some of the things they’ve been promised in
low taxes and high benefits
cannot be sustained.”
With unemployment at al-
most 10 percent, creating jobs
is another priority. But if that
means borrowing and spend-
ing money—the two voter
mandates will be in conflict.

‘It’s pretty clear
the American peo-
ple want a smaller,
less costly and
more accountable
government.’

—House Republican
leader John Boehner
Social Security. Because
of its size, its long-term fi-
nancial challenges and a
GOP plan to partially privatize it, Social Security is part of the bud-
get debate. One plan o;ered by commission co-chairs Simpson and
Bowles proposed raising the retirement age to 68 by 2050 and to 69
by 2075 and gradually reducing benefits.
The probable new chairman of the House Budget Committee, Wis-