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If it makes both the right and the left unhappy, that's a good thing.
Deficit Panel's Leaders Push Cuts - WSJ.com
WASHINGTONA 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 classincluding 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 ratefrom 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 earmarksprovisions inserted into legislation for lawmakers' pet projectswould 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 knownthis 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 revenuesabout 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.
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Deficit Panel's Leaders Push Cuts - WSJ.com