The pundits are all abuzz over the initial proposals to cut the deficit. The extremes on left and right are united in a spirit of condemnation: the left won’t broach cuts in social services, and the right can’t abide raising taxes. Since the entire committee won’t publish its formal proposals until December 1, these recommendations put forth by the co-chairmen Alan Simpson (at left in photo) and Erskine Bowles (at right) are in essence a trial balloon.

But they serve a useful function. They are calling attention to the harsh reality: as a nation, we are hellbent on the path to bankruptcy.

In 25 years the ratio of debt to G.D.P. will be an unsustainable 185 percent. We are now spending a greater share of the economy than any time in the last 60 years, while income is at its lowest level in the same period. If we continue borrowing 40 cents for every dollar we spend, we—the world’s largest economy—will default. With unpredictable repercussions that will reverberate throughout the global economy.

There is no painless way to wrench the economy back onto a fiscally responsible path. “It’s not going to be easy,” said Bowles last September. “It’s not going to be fun, and in many cases, it’s also not going to be popular. It is going to require sacrifice on the part of all Americans to get there.”

Cutbacks in spending won’t suffice. We also have to increase revenue, because taxes are the government’s sole source of income. The devil, of course, is in the details, because every cut hurts.

It’s important to note the distinction between discretionary spending, which is negotiated each year in the budget process, and mandatory spending on programs such as Social Security, Medicare and Medicaid, the so-called entitlements. Together, all the discretionary spending accounts for less than 40 percent of the federal budget. More than half of that goes for security: funding the Department of Defense, two wars, and Homeland Security. The rest goes to many other departments, such as Transportation and Education.

According to Congressional Budget Office projections, baseline discretionary spending is expected to total $1.4 trillion over the next ten years. Cost-cutting proposals include reducing the government work force by 10 percent, cutting hundreds of billions from the Pentagon budget, and slashing subsidies to agriculture. The Tea Party wants to eliminate earmarks, the “pork” that lawmakers take home to their districts. That may be a worthy idea, but it will have relatively little effect—earmarks account for less than 2 percent of the budget. On the other hand, letting the Bush tax cuts for the wealthy expire will save an estimated $700 billion over the next decade.

Mandatory spending poses the greatest challenge to the economy. It is one and a half times as much as all discretionary spending combined, and accounts for 56 percent of the budget. Medicare and Social Security are in thrall to a demographic quandary. They mostly benefit seniors, whose age-related medical costs are the highest and whose share of the population is growing. (It was 12.4 percent in 2000 and is projected to climb to 19.6 percent in 2030.) Any meaningful reform will have to deal with Medicare, but strangely, the commissioners have not recommended any specific action.

Assuming it survives the expected Republican onslaught, the Democrats’ health care reform legislation is a good start. It is projected to reduce the federal deficit by $143 billion in the first ten years, and by an estimated $1.2 trillion in the following decade. Social Security needs to be tweaked, but even without any adjustment, it pays for itself and will remain in the black until 2040.

Some proposals, like raising the eligibility age for Social Security and Medicare, sound pretty good, because people are living longer. If people continue working, they will help the economy grow, keep the tax base from shrinking, and hold down Social Security and Medicare costs. People who remain active are also healthier and happier. It turns out, though, that the gains in life expectancy are largely experienced by the wealthy, because they can afford a healthier lifestyle and better medical care. The people who most depend on Social Security are living only very slightly longer than they did 30 years ago. There’s an important difference, moreover, between expecting a manual laborer to continue heavy lifting until he’s 69 and requiring someone to keep a desk job for an extra nine years. Under one of the proposals, affluent seniors will receive reduced benefits—but “affluent” is defined as income over $37,000.

Other proposals inflict short-term pain and bestow long-term benefits. Raising the gas tax by 15 cents will harm people who must drive to work, but it will discourage unnecessary driving and thereby lower emissions while reducing our dependence on foreign oil. A carbon tax would have a similar effect. The resulting cleaner air would likely produce an indirect saving of lower health care costs.

A much larger savings would result from overhauling the income tax. Bowles and Simpson would eliminate all deductions and exclusions in return for lowering tax rates. Their proposal to cap federal income by lowering the highest tax from 35 to 23 percent is rather puzzling. Is their primary goal to reduce the deficit or to reduce taxes? Crunching the numbers, the non-partisan Tax Policy Center has found that the net result of their income tax proposals would be a tax increase over the rates of the Clinton years for all but the top 20 percent of families, who would pay less. The top five percent would receive the greatest benefit.

Why, at a time when the wealthiest one percent of Americans own 34 percent of all the private net worth, does the deficit committee propose transferring even more wealth from the have-ever-less to the have-more-and-mores?

It’s hard not to be dismayed when evaluating the agonizing choices we must make. It’s even harder to hold back the anger when you consider that this deficit—caused by two unfunded wars, unpaid-for tax cuts that mostly benefit the wealthy, and a financial crisis sparked by Wall Street’s greedy recklessness—now has to be corrected largely at the expense of people who are poor, or elderly, or disabled.

Whatever remedies are applied will affect everyone, especially older women who are financially vulnerable. So it behooves us to be proactive—to write or call our senators and representatives to let them know what we can live with and what we can’t. As a warm-up, you might try your hand at developing your own solution, courtesy of the interactive budget puzzle published in the New York Times on November 13. (A small portion is reproduced below.)  If this deficit dilemma is now everyone’s problem, it will take everyone’s input to find a solution we can live with. Go ahead and give it a try—and let us know what you come up with.

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