A White House commission proposes to cut the federal budget deficit by hundreds of billions a year. Social Security benefits, middle class tax breaks and defense spending are of interest.
The initial plan is to stop various breaks the middle class are getting like the deduction for home mortgage interest.
On Social Security, the plan would slowly raise the retirement age to 68 around 2050, 69 by 2075. It would combine various cuts to benefits with an increase in taxes on wealthier people’s incomes. Also, it’s looking to curb federal spending on health care except what’s needed for the recently passed health care plan. This would be achieved by introducing further changes, including reform of medical/malpractice law, and by slowing the growth of the Medicare program.
A version of the plan would dramatically lower individual rates to 9%, 15% and 24%.
“Tough choices” are going to be necessary to tame a deficit that has soared to more than $1 trillion a year, President Barack Obama shared with leaders of his own Democratic Party.
“Before anybody starts shooting down proposals, we need to listen, gather up all the facts, and be straight with the American people,” Mr. Obama stated at a press conference Thursday in Seoul, where he attended a Group of 20 nation’s summit.
The commission staff’s goal is to curtail growth of the federal debt by roughly $3.8 trillion by 2020.
“In the end, the president is going to have to decide whether to incorporate some of this into the 2012 budget,” David Walker, a former U.S. comptroller general and an advocate for deficit reduction. “He’s going to have to lead, because if the president doesn’t lead on this, it goes nowhere fast.”