WASHINGTON -- In what will stand as the greatest irony of Barack Obama's soak-the-rich presidency, his deficit-cutting commission is proposing to sharply lower the top income tax rates on the wealthy.
The national news media hasn't really caught on to this part of the story yet, focusing on the bipartisan commission's proposals to raise Medicare taxes, raise the Social Security retirement age and freeze federal payscales.
But the plan's tax-rate cuts, designed by the panel's co-chairmen -- Democrat Erskine Bowles and Republican Alan Simpson -- are to a large degree based on economic supply-side axioms championed by former president Reagan and an army of free-market revolutionaries led by tax-cut crusader Jack Kemp. The tax-rate reforms, lowering the top tax rate to 28 percent, passed in 1986, with the support of liberal Democrats such as Dick Gephardt and Bill Bradley.
Like Reagan, Bowles (Bill Clinton's White House chief of staff) and Simpson, a cagey and cunning former senator from Wyoming, want to get rid of $1 trillion in corporate welfare and other tax breaks and loopholes, to bring the tax rates down and boost economic growth.
We are talking major tax-rate reductions here. While Obama has been bashing Wall Street fat cats, big banks and insurance companies, and is content with the 35 percent tax rate on U.S. corporations, his commission wants to sharply reduce that rate down to 28 percent, to make domestic enterprises more competitive in the global economy.
For the past two years, Obama has been attacking U.S. business firms for expanding into foreign markets, proposing that we punish those companies that "send jobs abroad" with higher taxes. But the Bowles-Simpson plan sensibly rejects that policy, proposing instead that Congress stop taxing overseas profits of U.S.-based global companies.
Obama ascended to the presidency on a campaign that blamed all of our country's economic woes on former president George W. Bush's 2001-2003 income-tax cuts. (Never mind that Obama wants to keep 98 percent of them.)
Since then, he has been saying that the best thing we can do for our economy is to raise the top tax rates on the wealthiest Americans -- people earning more than $250,000 -- because they aren't paying their fair share. Actually, the richest five percent of Americans already pay about 45 percent of all federal income taxes, but Obama never mentions that.
But the core of the commission's deficit-cutting plan suggests that we need to lower the income-tax rates to stimulate economic growth, business investment and expansion, and job creation, which in turn will boost federal revenues, reduce borrowing and eliminate the budget deficits.
The commission proposes two reform plans, depending on how many tax deductions and other tax breaks Congress is willing to end to offset the costs of the rate cuts. One set would lower the highest marginal income tax rate to 23 percent; the other would bring it down to 29 percent.
So there is Obama, sitting in the Oval Office, talking about raising taxes on the wealthiest Americans to more than 40 percent, while across town, his commission is pushing to cut the top marginal tax rate in half.
Overall, there's plenty in the commission's proposals to hate, on both sides of the aisle. Democrats, maybe most Republicans, don't like raising Social Security and Medicare taxes, and there are deep doubts about the so-called "tight" spending caps. And many other tax ideas aren't going anywhere, like limiting the mortgage interest deduction, or raising tax rates on capital gains and dividends.
But other ideas have won praise from GOP members and their leaders in Congress: Cutting 200,000 government workers from the federal payroll through attrition, banning earmarks and especially cutting the tax rates.
Rep. Jeb Hensarling, (R-TX), a House GOP leader, said he could swallow some of the plan's proposals on defense cuts and broadening the tax base in exchange for cuts in the income tax rates, and tougher spending cuts, particularly for Obamacare.
GOP Sen. Tom Coburn, a physician from Oklahoma, who has blocked so many spending bills that his critics call him "Dr. No," said, "This (deficit) problem is so real, Tom Coburn can't have everything he wants."
At this writing, the commission doesn't appear to have a majority for the plan, and Congress isn't bound to accept any of it. But there is growing support among the GOP for the tax-rate cuts.
House Minority Leader John Boehner of Ohio, who will be the next speaker, has endorsed the idea of closing tax loopholes and other deductions to bring the rates down and simplify the tax code.
Former congressman Vin Weber of Minnesota, a top lieutenant in Kemp's tax-cut revolution during the Reagan years, is urging Republicans to endorse the idea again. "I'm telling Republicans to acknowledge that a positive argument has come out of the deficit commission. Let's say yes to something," he told the Washington Post.
Irony of ironies, Obama's commission chairmen have embraced the kind of deep income-tax cuts for the wealthy that he has fiercely opposed throughout the first two years of his presidency.