It's interesting that you bring up the problem with the debt without even mentioning the Bush Tax cuts or the $700 billion we could save by allowing the cuts for the top two brackets to expire. Instead you decide to go after the home mortgage deduction with a zeal that could only come from someone whose house is paid off. At some point you're going to have to realize that the middle class in this country is tapped out, and an outright end to the home mortgage deduction will likely push many middle class homeowners out of their homes. Cutting the cap from 1 million to 500k and or ending the deduction for second homes would be a better way to increase revenues without punishing the middle class. The problem with Medicare will not get fixed until we fix the ever increasing cost of health care across the board. Something the recent health care bill did not do.
This brings be to what has to be the most egregious part of your piece, bringing up bipartisanship with no mention of the utter lack of it on the GOP side with the exception of the two senators from Maine. President Obama has repeatedly extended hid hand to the GOP only to have it bitten with wild accusations of "Death Panels" and "Socialism" for a health care bill that maintains the private health insurance industry. Of course, first one must presumably define "bipartisanship" before judging whether or not it's been attempted. Personally I expect politicians to handle disagreements the way my wife and I do. Namely "give a little; get a little", and try and meet each other halfway. In the health care debate the Democrats were clearly willing to give a lot, sacrificing the "Public Option" much to the chagrin of their base. The Republican's response was to "make the health care bill Obama's Waterloo". A charitable description of how the GOP seems to currently define "bipartisanship" would be legislation that contains nothing they don't like. Yes we all want the other Washington (and Olympia for that matter) to function like adults and work together for the good of the country. And yes the Congressional Democrats could be better behaved, but this does not alter the fact the the current Democratic Congress has treated the Republicans far better than the Republicans treated them when the roles were reversed a few years ago. Or the fact that the Obama Administration has at least tried bipartisanship only to be vigorously and continuously rebuffed.

Repealing the mortgage interest deduction would be bad for builders, banks, and middle class homeowners. That may well be the worst tax reform idea I've ever heard.

Thanks for your early comments. They illustrate why addressing and solving
these big problems will be difficult.

First, blame placing and reflexive partisanship will get us nowhere.

Second, the mortgage-interest deduction was cited only as a major example
of a "tax expenditure" among many others. Of course, the initial effect of its repeal or phaseout---as the repeal or phaseout of any tax break for a favored company or sector---would be to put the housing sector on even footing with other sectors not receiving such favored treatment in the tax code. Long term, however, housing demand will continue to be driven by demographics, household formations, and the existence of low interest rates. Short term, banks and builders might be unhappy with repeal or phaseout of the home mortgage deduction---although it is hard to see how they could be unhappier than at present, in the wake of the burst housing bubble. Middle-income citizens should be happier in the long term, as they would be able once again to afford housing and would be paying lower property taxes.

A "neutral" tax code, not favoring one economic activity over another,
also will lead to more efficient and balanced growth in the overall economy.

Many years ago, I worked for a visionary and able man, Jean Monnet, known
as Mr. Europe (he had the original idea leading to formation of what is now the European Union). Facing far more difficult problems---those of recurring war and rivalry among European countries---he adopted a successful strategy which he often described: "If you put disagreeing parties on opposite sides of the conference table, and proceed from fixed positions, nothing gets solved. But if you put the parties on the same side of the table, and the problems on the other, something can get done."

I saw that principle applied, in particular, by civil-rights leaders of the early 1960s, by President Lyndon Johnson in his "consensus" approach to enacting the Great Society, and by Senator Ted Kennedy in his many
bipartisan initiatives on Capitol Hill.

If we begin by making partisan points, or by placing the interests of one industry over the public interest, we can be sure that deadlock will continue and little will get done.

"Businesses learned to do the same work with fewer employees, thus increasing their productivity."
To a great degree I think this is true, but there is a significant portion I will call productivity profit taking.
a portion of the population did not retire, their replacements were not hired. The training of those new hires is a slight drag on productivity as they learn things you can't learn in school.
Like it or not, we all have to retire sometime, not always by our own choosing. The inevitability would, my guess, catch up when those 57-year-olds turn 62 and 65.
The replacements will be young, who they replace will be older, those laid off will be middle aged and doing something entirely different.
Lots of donut holes in the demographics of some companies.
Like ripples in a pond.

"Homeowners can deduct up to $1 million annually for their mortgage payments."

You are misstating this. Homeowners can deduct the INTEREST on up to a $1 Million mortgage (plus the interest on another $100K home equity). That means closer to $60,000 can be deducted.

If the Bush tax cuts expire, 80% of itemized deductions will phase out for high end tax payers. That drops the limit to closer to $16,000.

For anyone who says repealing the home interest deduction is a non-starter, consider that raising the standard deduction to $20,000 would eliminate itemimzing for most tax payers.

I'm all for taking a harder look at tax expenditures, but the obstacles are usually deeper than deep-pocketed special interests. A well-documented problem with a state dealing with a major employer is that the employer can extract tax favors by threatening to relocate. The threat is real, and major companies can and do make location decisions on the basis of taxes. And so you and I grudgingly pay a higher sales tax because if we eliminated the Boeing exemptions, the job loss (and associated revenue loss) would be far greater than the purported gains from the tax.

The ultimate question is whether enough Americans are capable of thinking rationally about our myriad problems to support implementation of intelligent systemic solutions. At this juncture fear, anger and the resultant denial and scapegoating are carrying the day. We can certainly hope that election of more Republicans will create some impetus toward shared responsibility, but that outcome seems unlikely in the short-term.

A good barometer for irrational behavior is probably the percentage of the population that continues to deny the reality of climate change and its human component. People who fall in this category will most likely remain engaged in fanciful myth-making across the board. They will resist as the work of the devil any recourse to fact-based analysis. They can be expected to react with ferocious anger to anyone who challenges their cherished fantasies. If their numbers become large enough, they will block effective solutions of any kind and may even succeed in imposing counterproductive strategies. As the situation deteriorates further, totalitarian approaches (clothed in national security garb) are likely to become more attractive.

Normfox got it right on TVD's failure to even mention how much repealing the Bush tax cuts would do to reduce the deficit. He also got it right in nailing TVD for his continued refusal to recognize that the Republicans are mainly responsible for the current government stalemate. That's not a "partisan" analysis, that's an analysis based on overwhelming evidence, which the champions of "bipartisan centrism" stubbornely refuse to acknowledge. Today's Republicans, unlike those in TVD's glory days, are not willing to go along with anything unless it's everything they want and nothing the Dems want. On Social Security, if TVD read up on the issue, he would find out that raising the cap on taxable payroll income and including investment income would largely take care of the long-term financing problem -- without creating a huge new problem for people who truly can't wait until age 70 for SS benefits because employers are not hiring people in their 50s and 60s (TVD needs to go out and talk to ordinary workers at that age about their job situations). Finally, on Medicare, TVD refuses to acknowledge that the new health reform law includes a lot of measures backed by both Republican and Democratic health experts to reduce the growth of Medicare and general health cae spending. I've been interviewing hospital officials and they definitely see the law curbing federal and private payments to their institutions.

One other glaring contradiction in TVD's piece: He approvingly cites Bernanke's position that the Fed needs to focus its policies on job growth and expansionary measures. But then TVD advocates big cuts in federal and state spending that would have a major contractionary impact on the economy. He doesn't seem to recognize the negative jobs impact of what he proposes, even though he says the country is going to face protracted job shrinkage over the mid- to long-term. While it may feel good from a kitchen-table perspective to advocate belt tightening, what works at the household level doesn't necessarily make sense at the national policy level. And even households go into debt to finance necessary investments for future growth and advancement.

Day-Later Comments:

Suggest that it is important to disengage from partisan issues du jour---such as the present debate about extension of the Bush tax cuts---to the longer-term issues suggested in my piece.

Many Presidents and Congresses, of both parties, have raised or cut taxes
according to their judgments about the economic circumstances of the time.
Right now debate centers around extension of the Bush tax cuts, which will expire Dec. 31 unless renewed by the Congress. There is a strong bipartisan consensus that most of the cuts should be extended because of
the impact their repeal would have in the present stagnant economy. The
only disagreement is whether upper-income cuts should be extended or repealed. Congressional Republicans and some Democrats favor their extension and the Obama White House and a majority of Democrats favor their repeal. Its disposition in the lameduck Congress that will return after the election will depend, in part, on the post-Nov. 2 political climate.

Truly important, and imperative to our long-term well being, is the need
to check Social Security/Medicare spending. A bipartisan commission will
come up with recommendations for the new Congress. Similar commissions have made similar recommendations in the past---there is no mystery about the options available to deal with the problem; elected officials have simply preferred to defer any serious reform. The path of Pentagon spending also is important. Drawdowns, and eventual withdrawals, in Iraq
and Afghanistan will help reduce defense spending, event though there will be continuing pressures from defense contractors and the military services
(Eisenhower's "military/industrial complex") to sustain it at current levels. This entitlement-program and defense spending is where the biggest
impact can be made in reducing federal deficits and debt. So-called tax expenditures also can be trimmed to effect debt reduction. As readers have pointed out, this is a tough one because each loophole or subsidy has a powerful sponsor. Even the foolish and expensive Ethanol subsidy continues to be extended and increased, year by year, despite overwhelming substantive evidence that it is wasted money.

Important to differentiate between short-term taxing and spending decisions---especially affected now by our current economic situation---
and the longer-term decisions which will make the real difference in
coming to terms with unsustainable public debt burdens.

Where does TVD get this notion that there is "no mystery" about how to curb Medicare and general health care spending growth? I've been covering health care for more than 25 years and I don't know anyone who's truly knowledgable about health care who thinks there are obvious, simple fixes to the cost problem. As President Obama and health experts have said repeatedly, curbing health care costs is going to be a long, hard process -- requiring substantial changes by insurers, doctors, hospitals, patients, and many many powerful interest groups. The new health care law contains important measures to start that process. TVD, let's stop pretending that there are easy, obvious answers.

And the Bush tax cuts is clearly a long-term issue, given that extending those tax cuts will add to the deficit for decades to come -- and the impact will grow. Calling that an "issue du jour" is absurd.

TVD earned a living for most of his life working for partisans and taking their money, now he writes that "reflexive partisanship will get us nowhere". Normfox and Harris, what TVD means is that partisanship is only bad when Democrats do it.
Ted, I look forward to your column explaining how you came to the conclusion that your life's work as a partisan was a mistake. Should be a dandy.

A major post-election challenge, beyond the problems of tax policy and spending control, is the imperative to grow the economy and put people back to work. This, IMO, should be our biggest concern. There has been no cooperation, only obfuscation, from congressional Republicans to the somewhat tentative attempts by the Administration to jump-start a new economic model in this very competitive world. It involves education, retraining, and yes even targeted tax breaks for r & d. The American Prospect magazine (from a liberal Democratic slant) has addressed opportunities to reestablish a competitive manufacturing sector. Others including pundits have recently weighed in. Tom Friedman had a strong piece in the Times last month that’s worth a read. It’s at http://seattletimes.nwsource.com/html/opinion/2013031268_friedman30.html

An excerpt:

Democratic pollster Stan Greenberg told me that when he does focus groups today this is what he hears: "People think the country is in trouble and that countries like China have a strategy for success and we don't. They will follow someone who convinces them that they have a plan to make America great again. That is what they want to hear. It cuts across Republicans and Democrats."

To me, that is a plan that starts by asking: What is America's core competency and strategic advantage, and how do we nurture it? Answer: It is our ability to attract, develop and unleash creative talent. That means men and women who invent, build and sell more goods and services that make people's lives more productive, healthy, comfortable, secure and entertained than any other country.