I never thought I'd be saying this, but when it comes to real "shock and awe," President Obama has George W. Bush beat. Hands down.

As you've probably heard, the co-chairs of the president's deficit-reduction commission just published recommendations to slash the federal deficit by $3.8 trillion over the next 10 years. Granted, these cuts won't pass easily. Indeed, the first round of proposals is only a starting point for negotiations. True, too, our national debt now stands at $13.7 trillion and change. Even if passed in their entirety, these budgetary axes can only whittle away at our national IOU -- but it's a start.

Now, as investors, it's time we started thinking about changes coming down the pike. So today, I'm going to run down a few of the bigger proposals and sketch out for you a few of the companies that stand to fare best (and worst) if they become law. Onward.

Death by a trillion cuts
First up, defense spending. I've already told you there's a movement afoot to slash Pentagon spending by $1 trillion over the next 10 years. Relative to that, the commission's proposals actually tread lightly, calling for just $100 billion in reductions. Among the casualties, Textron would lose V-22 Osprey sales, General Dynamics could see and end to perhaps $15 billion worth of amphibious-vehicle revenues, and Lockheed Martin could find its F-35 program -- expected to provide 20% of profits in future years -- sliced significantly.

On the plus side … we still need fighter jets. To fill the gap created by nixed F-35s, the commission proposes buying more F-16s from Lockheed and more F-18 fighters from Boeing (NYSE: BA) -- a company that just months ago looked to be out of the fighter-jet game for good.

Biggest winner here: Boeing.

Panic at the pump …
But spending cuts go only so far. The commission also needs to raise revenues, and one of the easiest places to hide a tax increase is at the gas pump. Here we're looking at a $0.15-per-gallon tax increase -- a 5% boost on the cost of $3-a-gallon gas. The logical beneficiaries here are companies such as GM and Ford (NYSE: F), which are quickly moving to introduce electric cars to American motorists. But these companies also depend on gas-guzzling trucks and SUVs for large chunks of their profit streams. A 5% increase in gas prices could hurt demand for their products as much as it helps.

So who does win? Call me crazy, but I think pricier gas makes Exxon Mobil (NYSE: XOM) the contrarian play here. Raise the price on gas, and demand might fall. But just as governments silently slip tax increases into the pump, so, too, can gas companies such as Exxon boost their profit margins -- doing so while consumers attribute price increases to "that darn gasoline tax."

Advantage: Exxon.

… and frantic on the farm
Picking up the ax again, the commission proposes cutting farm subsidies by $3 billion. That's a politically popular idea (in non-farm states), but it won't be good news for agribusiness suppliers such as Monsanto (NYSE: MON) and PotashCorp (NYSE: POT). Their customers could lose a lot of money that formerly, was spent on them. On the plus side, for the same reasons I expect to see Exxon survive its tax increase unscathed, I'd expect supermarkets to benefit from the rising price of produce. Price increases will be blamed on the government, thus allowing the purveyors of produce to slip in extra profit margin unnoticed.

Advantage: Kroger (NYSE: KR), which gains customers who (1) flock to it for its low prices and (2) find its offer of $1 off gas for frequent shoppers increasingly irresistible.

The biggest winner, is … (drumroll, please)
Probably the commission's most controversial proposal is its plan to cut the nation's most sacred cow: The home mortgage interest deduction (HMID), which will be capped at mortgages of $500,000. Fully 67% of Americans own their own homes, and it's rarely a good idea to anger a majority. I guarantee you that homebuilders such as Pulte, and big mortgage lenders such as Bank of America (NYSE: BAC), will raise holy hell over this proposal. "How can you even think of doing something that will discourage home buying?!" they'll scream. "It'll kill the housing market!"

Don't believe it. In fact, this proposal just might be the best news yet. The median home price in the U.S. is well below the $500,000 cap the commission proposes -- well below $200,000, actually. As a result, the proposed cap will not hurt most Americans. It might even help. Yes, capping the HMID will reduce the value of high-priced homes. But by pushing demand down-market, it could well perversely increase the value of existing, cheaper homes -- like the one that you probably live in (statistically speaking.)

Foolish final thought
For all the controversy being whipped up already, the thing that actually strikes me most about the commission's proposals is their … modesty. I mean, if we can really "fix this" by buying a few fewer warplanes, paying a few cents more at the pump, and making a few other tweaks -- lower tax rates here, raise 'em a bit there, delay retirement by a year or two -- why not give it a shot?

Seriously. That's not a rhetorical question -- why shouldn't we support the deficit reduction commission's co-chairs' proposals? Tell us below.

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Fool contributor Rich Smith owns no shares of any company named above.

Ford is a Motley Fool Stock Advisor selection. Motley Fool Options has recommended a synthetic long position on Monsanto. The Fool owns shares of Bank of America and Exxon Mobil. Try any of our Foolish newsletter services free for 30 days.

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