Report of the Bipartisan Commission on Entitlement and Tax Reform
On November 5th 1993 President Bill Clinton—by Executive Order #12878—created the Bipartisan Commission on Entitlement Reform. The Commission—which began work in February 1994—was co-chaired by Senators Robert Kerrey (D-NB) and John Danforth (R-MO). The Commission was comprised of ten U.S. Senators, ten members of Congress, and twelve members of the public, along with a professional staff of 27.
In their approach, the Commission went well beyond the topics of Social Security and Medicare and lumped together everything that might be considered an “entitlement”—from welfare programs to the home mortgage interest tax deduction to the cost of federal civilian and military retirement. Its goal was to devise a package of proposals which would reduce the overall cost of all of these programs.
The Commission made little progress on its task, and was only able to release an “Interim Report” in August 1994, a report which merely defined the size of the problem, without containing any suggested policies to address it. Even without any policy recommendations, unanimous agreement could not be reached as only 30 of the 32 members signed off on the Interim Report.
One of the Commission’s more noticeable products was a computer game which allowed members of the public to try and balance the federal budget through various policy options.
The two co-chairs of the Commission developed their own Social Security proposal, which featured raising the retirement age to 70, a cut in the Social Security payroll tax, with the money redirected into mandatory private accounts, and adopting price-indexing (among other changes). This was perhaps the first advocacy of “carve-out” private accounts, and of price indexing, by a prominent mainstream group.
Kerrey and Danforth had hoped to make their overall proposal the basis for the Commission’s report, but there was insufficient support for their proposal.
Ultimately, the Commission failed to achieve consensus and went out of business without issuing any recommendations. Instead, its final report was a compilation of competing proposals. The two co-chairs advanced their own proposal, and another six members advocated four competing plans, while eight members inserted into the report their critical remarks on the plans of the other members. Although the group was not able to agree on any policy recommendations, the Commission is thought to be a milestone in putting on the policy agenda the future of the nation’s entitlement programs.
BIPARTISAN COMMISSION ON ENTITLEMENT AND TAX REFORM
FINAL REPORT TO THE PRESIDENT
December 1994
Reform Proposals of Commissioners
Reform Proposal of Senators J. Robert Kerrey and John C. Danforth
Reform Proposal of Senator Alan K. Simpson and Congressmen J. Alex McMillan and Porter J. Goss
Reform Proposal of Commissioner Peter G. Peterson
Reform Proposal of Commissioner Robert Greenstein
Reform Proposal of Commissioner Richard L. Trumka
Additional Views of Commissioners
Statement of Congressman Michael N. Castle
Statement of Congressman Christopher Cox
Statement of Commissioner Robert E. Denham
Statement of Congressman John D. Dingell
Statement of Commissioner Thomas J. Downey
Statement of Commissioner Robert Greenstein
Statement of Commissioner Peter G. Peterson
Statement of Commissioner Richard L. Trumka
Staff Summary of Long-Term Reform Options
Staff Reference Materials on Long-Term Reform Options
Introduction
A. Congressional, Civil, and Military Retirement
B. Health Programs
C. Social Security
D. Comprehensive Benefit Reforms
E. Reduce Tax Expenditures
Sources and Assumptions of Projected Options
Appendix
Staff of the Bipartisan Commission on Entitlement and Tax Reform