The "status quo
is not an option", says the non-partisan GAO.
Tax breaks such as deductions for home mortgage interest and state and local taxes cost the federal government $728 billion last year and need to be reexamined, the Government Accountability Office said in a new report on Friday.
Comptroller General David Walker, who heads the agency, said the government must look at ways to rein in the growth of so-called tax expenditures if it is to avoid huge fiscal deficit problems in future years.
"We're on an imprudent, unsustainable fiscal path," Walker told a news conference. "The status quo is not an option and we're not going to grow our way out of this problem and the sooner we get started the better." [...]
The agency, however, is not recommending which areas should be targeted for cuts. Walker said that's for politicians to decide, and it will likely take 20 years to accomplish.
"We're in the fact business, not the policy business, but you need facts to make good policy and quite frankly that doesn't happen enough in this town," Walker said.
The partisan (R) OMB responds:
A spokesman for the Office of Management and Budget dismissed the report, saying it prescribes de-facto tax increases.
"We do not intend to implement the report. The administration rejects any attempts to address the long term fiscal imbalances with tax increases," said OMB spokesman Alex Conant, spokesman for OMB.
If federal revenues are to be boosted, and if "growing our way out" of the deficit is doomed to failure, as the GAO plainly indicates, then it seems a revision of tax policy is inevitable.
How that revision might look, I doubt it'll include the mortgage deduction. That has become akin to the social security third rail. Touching that would be political suicide.