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Saturday, December 4, 2010
New deficit plan recommends Social Security Cuts
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The co-chairmen of President Barack Obama's deficit commission are sticking with politically explosive proposals to raise the Social Security retirement age and curb benefit increases in a revised plan to wrestle the deficit under control.
The new plan by Erskine Bowles and Alan Simpson, to be publicly unveiled Wednesday, faces an uphill slog because of proposals to curb Social Security and Medicare costs, curtail a huge assortment of tax breaks like the deduction for mortgage interest and almost double the federal tax on a gallon of gas.
Though the ban appears unlikely to win enough bipartisan support from the panel to be approved, Bowles declared victory on Tuesday, saying that he and Simpson have at least succeeded in initiating an "adult conversation" about the political pain it will take to cut the deficit.
Bowles acknowledged the plan faces resistance from the 18 deficit commission members. Obama named the commission in hopes of bringing a deficit-fighting plan up for a vote in Congress this year, but it appears to be falling well short of the 14-vote bipartisan supermajority needed.
A new version of the plan, obtained by The Associated Press, makes mostly minor changes to a draft that whipped up enormous controversy when unveiled earlier this month. Some domestic spending cuts are modestly higher than previously proposed, and health care savings from overhauling the medical malpractice system would reap less than proposed earlier this month.
Unlike their original proposal, Bowles and Simpson stop short of calling for caps on medical malpractice awards. Instead they recommend changes in how awards are made.
But other proposals remain the same. Among them are a gradual increase in the Social Security retirement age to 68 by 2050 and 69 by 2075, using a less generous cost-of-living adjustment for the programs and increasing the cap on income subject to Social Security taxes.
The plan also retains a 15-cents-per-gallon increase on gasoline, a three-year freeze on federal worker pay and cutting 200,000 workers from the federal payroll through attrition.
The proposal obtained by the Associated Press was a draft that was still undergoing changes Tuesday evening.
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