Too much bipartisanship for tax and budget reform - too bad for federal finances

It is unfortunate that the Select Committee is unable to reach a compromise to find $1.5 trillion to budget changes to reduce the deficit over a ten year period. It is unfortunate for many reasons such as:

• We really need bigger changes than just the $1.5 trillion.
• If members cannot work together it is unlikely that the serious budget and tax problems we have can get resolved in a productive manner.
• Many of the changes that are needed should not be tied to politics. There are many areas of spending that defy logical explanation.

Regarding that last point, let's hear from politicians as to why the tax law:

• allows a interest expense deduction for the mortgage on one's second home.
• allows an interest deduction on up to $1.1 million of debt on a principal residence when the median home price in the US is under $250,000
• allows employees to exclude all of the health insurance benefit they get from their employer (why not tax at least 20% of it as a starting point - that would result in about $800 of tax for a $10,000 policy - good deal!)
• allows a capital gains rate of 15% (although temporary through 2012) - after the TRA86, the capital gains rate was 28%

And there is more. For example, why are across the board cuts better than targeted ones that get at areas of waste?

For a story on the impasse - see the Wall Street Journal, Debt Panel Folds Its Tent (11/21/11).

What do you think?