Deficit Panel Recommends 75% Spending Cuts, 25% Tax Increases

[Toro]

If it makes both the right and the left unhappy, that's a good thing.

WASHINGTON—A White House commission laid out a sweeping proposal to cut the federal budget deficit by hundreds of billions a year by targeting sacrosanct areas of U.S. tax and spending policy, such as Social Security benefits, middle-class tax breaks and defense spending.

The preliminary plan in its current form would end or cap a wide range of breaks relied on by the middle class—including the deduction for home-mortgage interest. It would tax capital gains and dividends at the higher rates now levied on wage income. To compensate, one version of the plan would dramatically lower and simplify individual rates, to 9%, 15% and 24%.

For businesses, the controversial plan would significantly lower the corporate tax rate—from a current top rate of 35% to as low as 26%—but also eliminate a number of deductions. It would make permanent the research and development tax credit.

Overall, the plan would hold down the growth of the federal debt by roughly $3.8 trillion by 2020, or about half of the $7.7 trillion by which the debt would have otherwise grown by that year, according to commission staff. The current national debt is about $13.7 trillion. ...

On Social Security, the plan would gradually raise the retirement age to 68 around 2050 and 69 by 2075. It would combine various cuts to benefits with an increase in taxes on wealthier people's incomes. It would also seek to rein in federal spending on health care beyond what's called for in the recently passed health-care overhaul. This would be achieved by introducing further changes, including reform of medical-malpractice law, and by seeking to slow the growth of the Medicare program.

The plan would make significant cuts on spending over which Congress has direct control, beyond entitlements such as Medicare. It identifies $410 billion in discretionary spending cuts by 2015. It proposes cutting the federal work force 10%, at a savings of $13.2 billion by 2015.

Congressional earmarks—provisions inserted into legislation for lawmakers' pet projects—would be banned permanently, saving $16 billion. ...

Some important interest groups were sharply critical, particularly over curbs on entitlement spending. The plans authors "just told working Americans to 'Drop Dead,"' said AFL-CIO president Richard Trumka. "Especially in these tough economic times, it is unconscionable to be proposing cuts to the critical economic lifelines for working people, Social Security and Medicare."

The conservative Americans for Tax Reform also blasted the plan. "It confirms what everyone has known—this commission is merely an excuse to raise net taxes on the American people," the group said in a written statement. Supporting the plan would violate the group's no-new-taxes pledge, which many Republicans and some Democrats in Congress have signed, it warned.

Sen. Gregg said that overall, federal spending takes a bigger hit in the plan than taxpayers do. The plan's goal is to reduce federal spending and federal revenues to 21% of gross domestic product. Federal revenues currently are projected to be about 19% of GDP in 2015, and outlays about 23%.

It would seek to achieve the pullbacks through a mix of spending cuts and increasing tax revenues—about 75% in spending reductions and about 25% from the tax side.

If the plan was adopted in its entirety, it would reduce the deficit to 2.2% of gross domestic product by 2015, exceeding the target set for the panel by the White House of lowering the deficit to 3% of GDP.

...

Deficit Panel's Leaders Push Cuts - WSJ.com

 

[topspin]

and like all other commisions, 6 months after completion no one will be able to name them.

 

[Stephanie]

Oh yea, we get MORE TAXES...that makes me happy happy happy.

 

[Toro]

But given the political intransigence on both sides of the aisle, it may take a full-blown crisis to get it done. Sacred cows are going to have to be gored.

A plan offered by the leaders of President Barack Obama’s commission to reduce the federal deficit might work. It just won’t happen.

The co-chairmen proposed a $3.8 trillion deficit-cutting plan yesterday that would trim Social Security and Medicare, reduce income-tax rates and eliminate tax breaks including the mortgage-interest deduction. It would reduce the annual deficit from $1.3 trillion this year to about $400 billion by 2015 and start reducing the $13.7 trillion national debt.

“Mathematically it apparently works,” said Stan Collender, a former Democratic House and Senate budget analyst and managing director of Qorvis Communications in Washington. “Politically, it is going to have a lot of trouble getting support from more than just the two co-chairs.”

The plan would raise gas taxes, slash defense spending and farm subsidies and bring down health-care costs by clamping down on medical malpractice suits. The Social Security retirement age would rise to 68 in about 2050 and 69 in about 2075.

Its release created instant opposition from Democrats, some Republicans and groups such as the Mortgage Bankers Association and the Aerospace Industries Association.

‘Simply Unacceptable’

Democratic House Speaker Nancy Pelosi called the targeting of Social Security and Medicare “simply unacceptable,” and Republican Representative Jeb Hensarling of Texas expressed opposition to proposals to raise taxes. ...

“Is America ready for an adult conversation on the deficit?” said Representative Jim Cooper, a Tennessee Democrat. “It’s ‘put up or shut up’ time.” ...

Best quote yet. Most ideologues on both sides aren't ready for an adult conversation.

Under one option, income-tax rates would be reduced to three levels: 8 percent, 14 percent and 23 percent. Now there are six tax levels ranging from 10 percent to 35 percent. The corporate income-tax rate would be cut to 26 percent from 35 percent.

Wiping out all tax breaks, including the home mortgage- interest deduction, while lowering rates would cost taxpayers $100 billion a year. Members of the panel could decide to keep some of the breaks by offering offsetting cuts, Bowles said. ...

Overall, yesterday’s proposal would raise taxes by $751 billion over 10 years, including a 15-cent increase in the gas tax that would be phased in starting in 2013. Farm subsidies would be cut by $3 billion a year.

The plan calls for discretionary spending to be cut by $1.4 trillion over 10 years, while mandatory spending -- including Social Security, Medicare for the elderly and Medicaid for the poor -- would be reduced by $733 billion. ...

The plan spells out $100 billion in defense cuts, including freezing Defense Department salaries and noncombat military pay at 2011 levels for three years, cutting overseas bases by one- third and doubling proposed cuts in defense contracting. ...

Bowles said about three-quarters of the savings would come from spending cuts, with the remainder from tax increases.

It would reduce congressional and White House budgets by 15 percent, freeze federal salaries for three years and cut the federal workforce by 10 percent. House Republican leader John Boehner of Ohio, who will become speaker in January, said before the plan’s release that he supported a freeze on federal hiring and government workers’ pay.

No NPR, PBS Funding

The proposal would also end government funding of National Public Radio and the Public Broadcasting Service, begin charging fees to visitors to the Smithsonian Institution museums in Washington, raise fees at national parks and merge the Department of Commerce with the Small Business Administration.

It would eliminate the Office of Safe and Drug-Free Schools, whose budget Obama proposed more than doubling from 2008 levels. The plan said that “while school safety should be protected, violence and drug abuse are problems that occur far less on school grounds than elsewhere.” ...

Deficit Plan Pits $3.8 Trillion Math Against Politics (Update1) - Bloomberg.com

 

[Toro]

and like all other commisions, 6 months after completion no one will be able to name them.

Probably.

 

[Toro]

Oh yea, we get MORE TAXES...that makes me happy happy happy.

It's not supposed to make you happy. It's supposed to piss you off. If it is, the commission is doing a good job.

 

[mdn2000]

If it makes both parties happy, as in our political leaders happy, everyone loses, I would rather the liberals win than to have my taxes raised one dime.

75% cut in spending means instead of spending a 100 trillion dollars in ten years they will spend 25 trillion. That is a 75% cut in spending, but still a 25% increase so they must raise taxes 25%.

It really is the idiots who dont listen to Rush.

One tax, 10%, grow the economy to close the deficit. Take the power away from both parties, the power is to raise and lower our taxes, to spend money, to collect money, one tax, no income tax, no property tax, no death tax.

10%, grow the economy, after all we are the fairest most just people on earth, we need to grow.

 

[antagon]

i dont dig it. i'm ok with more taxes so long as expensiblility rises. they aim to lower both like idiots. the capital gains hike is sensible, but i think deductability for investment should be thrown in as a plus-side.

 

[Stephanie]

Oh yea, we get MORE TAXES...that makes me happy happy happy.

It's not supposed to make you happy. It's supposed to piss you off. If it is, the commission is doing a good job.

whatever

 

[mdn2000]

i dont dig it. i'm ok with more taxes so long as expensiblility rises. they aim to lower both like idiots. the capital gains hike is sensible, but i think deductability for investment should be thrown in as a plus-side.

Your okay with less money, no hike is sensible, nothing is sensible except one tax in the USA.

Tax imports to cut the deficit, tax the shit out of imports.

 

[antagon]

i dont dig it. i'm ok with more taxes so long as expensiblility rises. they aim to lower both like idiots. the capital gains hike is sensible, but i think deductability for investment should be thrown in as a plus-side.

Your okay with less money, no hike is sensible, nothing is sensible except one tax in the USA.

Tax imports to cut the deficit, tax the shit out of imports.

i personally think your ideas are silly. i suppose it would be neat to pay 10% tax, but that figure is arbitrary and cant be indicated to finance the reduction of debt, moreover the dollar or the government's role in the wider economy. the repercussions of such will not make for a great business environment after all.

tariffs are stupid in my opinion, and should not be revisited by any economy like ours.

 

[kyzr]

i dont dig it. i'm ok with more taxes so long as expensiblility rises. they aim to lower both like idiots. the capital gains hike is sensible, but i think deductability for investment should be thrown in as a plus-side.

Your okay with less money, no hike is sensible, nothing is sensible except one tax in the USA.

Tax imports to cut the deficit, tax the shit out of imports.

Nice thought, but tariffs always lead to disaster.

I like the commission recommendations as a good start, killing UHC and a few other budget-busters (Bush's prescription benefit for example). I also liked Wellstone's going after off-shore tax cheats. especially Swiss bank accounts, what ever happened to Obama's effort with the Swiss accounts? I heard a few news blurbs...then nothing?!

 

[Toro]

i dont dig it. i'm ok with more taxes so long as expensiblility rises. they aim to lower both like idiots. the capital gains hike is sensible, but i think deductability for investment should be thrown in as a plus-side.

Your okay with less money, no hike is sensible, nothing is sensible except one tax in the USA.

Tax imports to cut the deficit, tax the shit out of imports.

Nice thought, but tariffs always lead to disaster.

I like the commission recommendations as a good start, killing UHC and a few other budget-busters (Bush's prescription benefit for example). I also liked Wellstone's going after off-shore tax cheats. especially Swiss bank accounts, what ever happened to Obama's effort with the Swiss accounts? I heard a few news blurbs...then nothing?!

There's been a crackdown on offshore accounts.

 

[rightwinger]

Time for our Congress to act like adults

Put together a binding bipartisan panel to make the tough decisions. Balance the freak'n budget and set a path for long term deficit reduction

We need more money coming in...that means taxes
We need less money going out....that means spending cuts

Cut the partisan Bull Shit .....Get together and come up with a long term solution

Gimics and quick fixes won't do it

 

[Ravi]

Cut SS and medicare? I have a hard time seeing Congress do that...they'll lose the vote of the elderly which is well on its way to be the largest voting block in the country.

 

[rightwinger]

Cut SS and medicare? I have a hard time seeing Congress do that...they'll lose the vote of the elderly which is well on its way to be the largest voting block in the country.

We need to tell our old timers to rest easy....

We need SS and Medicare to be solvent. We need long term solutions not band-aids.

Raise the retirement age to 70 over the next 50 years, raise the cap on contributions, include medicare in long term healthcare overhauls.

Congress needs to show some balls

 

[Stephanie]

whoo boy, we need to tell the old timers to REST EASY.

we'll just cut your benifits, raise your age of retirement, and then tax the shit out of you.

I mean really, what good are the old timers anyway.

 

[Truthmatters]

Cut SS and medicare? I have a hard time seeing Congress do that...they'll lose the vote of the elderly which is well on its way to be the largest voting block in the country.

We need to tell our old timers to rest easy....

We need SS and Medicare to be solvent. We need long term solutions not band-aids.

Raise the retirement age to 70 over the next 50 years, raise the cap on contributions, include medicare in long term healthcare overhauls.

Congress needs to show some balls

Unfortunately they have to surrender their balls to win elections

 

[rightwinger]

whoo boy, we need to tell the old timers to REST EASY.

we'll just cut your benifits, raise your age of retirement, and then tax the shit out of you.

I mean really, what good are the old timers anyway.

Slow on the uptake aren't we Steph?

If you tell a 27 year old he has to work until 70 instead of 67 how does that affect those who already are retired?

If you pay SS tax on the first $150,000 instead of the first $125,000 you earn...how does that affect retirees?

If you have people pay their whole lives and then have nothing to give them...those are the people who are affected

 

[mdn2000]

i dont dig it. i'm ok with more taxes so long as expensiblility rises. they aim to lower both like idiots. the capital gains hike is sensible, but i think deductability for investment should be thrown in as a plus-side.

Your okay with less money, no hike is sensible, nothing is sensible except one tax in the USA.

Tax imports to cut the deficit, tax the shit out of imports.

i personally think your ideas are silly. i suppose it would be neat to pay 10% tax, but that figure is arbitrary and cant be indicated to finance the reduction of debt, moreover the dollar or the government's role in the wider economy. the repercussions of such will not make for a great business environment after all.

tariffs are stupid in my opinion, and should not be revisited by any economy like ours.

You stated your okay with less money and I am the one with silly ideas, here is a silly idea, private message me, I will give you my address, send me a check and we can cut out the middle man.

Taking the power away from politicians is a silly idea how.

10% is not arbitrary and can be used to reduce the debt, as I stated we grow the economy. Obviously this will be a very large economy.

Tariffs, or a tax is stupid but the complicated system we have now is not.

No tax for corporations importing product overseas but more tax, less money for you, is a better idea.

One tax, 10%, grow the economy and tax imports.