U.S. deficit panel chiefs say everything on table

* Independent deficit commission to meet this week

* Entitlement spending cuts need to be on table

* National consumer tax, or VAT, also in the mix

By Donna Smith

WASHINGTON, April 25 (BestGrowthStock) – The United States cannot
grow its way out of budget deficits and both revenue increases
and spending cuts will be needed to stem the flow of red ink
and create a brighter financial outlook, top members of a newly
created budget commission said on Sunday.

The independent National Commission on Fiscal
Responsibility and Reform created by President Barack Obama is
to hold its first meeting on Tuesday. The co-chairmen of the
18-member panel told “Fox News Sunday” that everything had to
be on the table as it considers ways to reduce huge deficits
and mounting debt.

“We’re not going to say we’re going to grow our way out of
this,” said former Republican Senator Alan Simpson. “Hell, we
could have double (-digit) growth for 30 years and never grow
our way out of this.”

The deficit was $1.4 trillion in 2009, nearly 10 percent of
the overall economy, and it is expected to be that much again
this year. Longer term, the retiring baby boom generation will
strain the Social Security retirement and Medicare health
program for the elderly, putting even more pressure on
government spending.

Erskine Bowles, former White House chief of staff under
President Bill Clinton, said spending on those politically
popular entitlement programs also has to be considered.

“If we’re going to be serious about balancing the federal
budget and righting this fiscal ship, then we have got to have
everything on the table, and that includes the entitlement
programs,” Bowles said. “We’ll never get to balance unless
they’re on the table.

Both liberals and conservatives have expressed concern
about the commission. It is due to make its recommendations in
December, well after the November mid-term congressional
elections where record deficits and the $12 trillion national
debt are likely to be be major issues.

Liberals are worried the panel will recommend deep cuts to
Social Security and Medicare as well as other social programs.
Conservatives believe the panel is a way to set the stage for
for raising taxes.

“I’m not a stalking horse for taxes,” Simpson said. “I had
a terrific record on that. I’m a stalking horse for my
grandchildren.”

Bowles said the panel should look at the tax system, which
critics say is so riddled with breaks and loopholes that it is
becoming dysfunctional, and that a European-style value-added
tax should also be on the table.

“I think there are many good arguments that you can make
for a value-added tax or consumption tax, as opposed to a tax
on wages,” Bowles added. “But I think it’s just one of the
things that ought to be on the table that we ought to
discuss.”

A value-added tax is imposed on goods at each stage of
production and critics say it would push the cost of goods too
high. Supporters argue it has some trade advantages as the tax
generally does not apply to exports but is put on imported
goods.

(Reporting by Donna Smith; Editing by Eric Walsh)

U.S. deficit panel chiefs say everything on table