Deficit Reduction Plan = Tax Hike

Taxation: Congressional hearings were held Thursday to create a task force that will write a deficit-reduction plan. Unfortunately, as some are pointing out, the proposed panel will be more of a tax-hike commission.

The bipartisan task force is to be made up of eight congressional Democrats, eight congressional Republicans and two participants from the administration. Its recommendations would go to Congress after next year's midterm elections - supposedly to keep the ideas from becoming campaign issues. Lawmakers would then vote on them in January 2011 before the next Congress is sworn in.

Today's record federal debt and deficits are inarguably a threat to our prosperity, and most Americans would agree they must be brought under control. But some in Washington don't believe that can happen through traditional channels.

We'd guess Democratic Sen. Evan Bayh of Indiana sums up the Beltway wisdom when he says that tension across party lines makes it tough to rein in the debt and deficits. "Democrats want to spend more than we can afford," he said. "Republicans want to cut more taxes than we can afford."

GOP Sen. Judd Gregg of New Hampshire, who with Democratic Sen. Kent Conrad of North Dakota came up with the idea for the panel, sees the parties in conflict joining hands and jumping "off a cliff together." As inspiring as that would be for many voters weary of Washington's insatiable appetite for other people's money, it's not likely to turn out that way.

Likelier, those who recommend spending cuts will be pushed off the cliff and unable to oppose tax hikes.

Which brings us back to Bayh's comment that "Republicans want to cut more taxes than we can afford." It's tax hikes, not cuts, that we can't afford. We can't even afford the taxes being imposed now.

Research has found that economic growth is maximized when combined federal, state and local taxes are 23% of the gross domestic product. The combined rate today is close to 30%.

America is the economic engine that moves the world. If the task force recommends tax hikes, and the Democratic Congress passes them and the president signs them into law, the shock will be felt here and abroad.

But if the panel does an honest analysis, it will find Washington has spending issues, not a revenue problem.