A presidential commission’s leaders proposed a $3.8 trillion deficit-cutting plan that would trim Social Security and Medicare, reduce income-tax rates and eliminate tax breaks including the mortgage-interest deduction.Increasing taxes and cutting defense spending will not be popular with conservatives, although the simplified tax rates will be, and Nancy Pelosi has already voiced her objection to tinkering with Medicare and Social Security:
The plan would throw out hundreds of tax breaks for items such as capital gains and child care. It would raise the gas tax, slash defense spending 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.
None of the proposals would take effect next year to avoid disrupting the economic recovery. Under one option, income-tax rates would be reduced to three levels: 8 percent, 14 percent and 23 percent. Currently 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 deduction, while lowering rates would cost taxpayers $100 billion a year under the plan.
House Speaker Nancy Pelosi of California called the plan “simply unacceptable,” saying older Americans “are counting on the bedrock promises of Social Security and Medicare.”This seems an odd objection since as far as I can tell from the article, few of today's "older Americans" will still be around when the new retirement age goes into effect.
Anyway, a detailed list of proposals can be found here. Something has to be done soon as one of the chairmen said when the proposals were released:
“This country’s out of money and we better start thinking,” said Erskine Bowles, co-chairman of the panel created by President Barack Obama. Without “tough choices,” Bowles said, “we’re on the most predictable path toward an economic crisis that I can imagine.”Indeed. If we don't do something to reign in entitlements and reduce the deficit the country our children and grandchildren inhabit will look very much different, and very much poorer, than the country we live in today.