WASHINGTON, Sept. 9 (Xinhua)-- The United States should bring its spiraling debt under control in a gradual and compassionate way that combines well-designed tax reform and careful spending cuts, said a former economic adviser to the Obama administration on Sunday.
The essence of compassionate deficit reduction is "to cut the deficit in a way that does as little harm as possible to people, jobs and economic opportunity," Christina D. Romer, the chairwoman of President Obama's Council of Economic Advisers, said in an article on The New York Times.
"We should pass a comprehensive, aggressive deficit reduction plan as soon as possible, but the actual spending cuts and tax increases should be phased in as the economy recovers," she added.
Romer argued that serious long-run deficit reduction measures should be paired with equally serious, near-term job measure, like a sizable short-run infrastructure program, a one-year continuation of the payroll tax cut for working families, and large tax credits for businesses increasing employment.
She noted that tax revenue increases should be part of the debt reduction package, calling for an end to the "preferential rate" on capital gains and dividends which benefit the wealthy.
"Government health care spending is a major cause of our terrifying long-run budget outlook. Any effective deficit plan has to slow that spending growth. But a compassionate plan would minimize risk to people, especially the most vulnerable," she stressed.
"The central question is whether Medicare and Medicaid should remain entitlement programs guaranteeing a certain amount of care, as Democrats believe, or become defined contribution programs in which federal spending is capped, as Republicans suggest."
In addition to increasing tax revenues and reforming health care programs, dealing with the deficit also requires trimming other spending programs which need to be chosen carefully, Romer said.
The lawmakers will return to Washington next week for a lot unfinished work. One of the pressing jobs is to work out a plan to avert the so-called "fiscal cliff" caused by tax increases and automatic spending cuts scheduled for the start of 2013.
As the November presidential election draws near, the Republicans and Democrats have ratcheted up campaign efforts but remain at odds over how to fix the budget and head off the large fiscal tightening which would endanger the faltering economy.