Budget analysts have been warning about these problems for more than a decade, to no avail. The longer Congress waits to tackle these issues, the harder they will be to solve. Obama has appointed a bipartisan commission to develop a plan to shrink the deficit significantly by 2015; its first meeting is later this month, with recommendations to Congress due by the end of the year. But the prospects of lawmakers acting on any deficit-reduction plans were thrown into doubt in January, when the Senate killed a proposal for a similar commission whose recommendations would be guaranteed an up-or-down vote in Congress.
Another step lawmakers could take would be to revive an idea from President Reagan's second term in office, when a bipartisan group of lawmakers set out to simplify the tax code. The resulting Tax Reform Act of 1986 eliminated many loopholes and breaks that lobbyists had extracted from Congress, broadening the tax base and imposing more equal burdens on taxpayers of similar means. Those steps made it possible to lower rates without sacrificing revenue or progressivity. In the years since then, much of that work has been undone, resulting in a tax code that's more complex, less fair and less efficient. Lawmakers have already started ratcheting up tax rates; the healthcare overhaul included $438 billion in higher excise and income taxes over 10 years. And Obama has called on Congress to renew only a portion of the tax cuts that President George W. Bush championed, allowing the top two tax brackets and the estate tax to rise back to their levels from a decade ago. Such a piecemeal approach exacerbates the complexity of the tax system. Lawmakers would be better off overhauling the tax code with an eye toward what was accomplished two dozen years ago.