How Obama's plan to cut the deficit compares with others
Thursday, April 14, 2011
How Obama's plan to cut the deficit compares with
others
By: Richard Wolf, USA TODAY
How President Obama's framework for reducing federal budget
deficits compares with other proposals:
Health care spending
•Obama: Cuts $340 billion over 10 years from
projected increases in federal health care programs while
preserving Medicare and Medicaid. Enforces the savings with a
process that would implement cuts if a future Congress refused to
make them.
•Fiscal Commission: Implements and expands
Medicare changes in the 2010 health care law that were designed to
reduce costs; sets limits for health care spending beyond 2020.
•Bipartisan Policy Center: Gradually raises
Medicare Part B (doctor) premiums from 25% to 35% of program costs.
Changes Medicare, starting in 2018, to a program that encourages
the use of private plans, but keeps traditional Medicare as a
backup system.
•House Republicans: Changes
Medicare, starting in 2022, to a system in which the government
would provide payments to beneficiaries to buy private insurance.
The average payment, which would go to the insurer, would be $8,000
in 2022. Raises eligibility age to 67 by 2033. Cuts Medicaid by
$750 billion over 10 years and turns it into a block grant to the
states. Repeals key parts of Obama's health care law.
Social Security
•Obama: Calls for bipartisan efforts to address
the retirement program without privatizing it or slashing benefits
in the future..
•Fiscal Commission: Gradually increases
retirement age to 68 by 2050 and 69 by 2075; raises the amount of
income subject to Social Security taxes in 2020 from about $168,000
to $190,000.
•Bipartisan Policy Center: Raises the taxable
income ceiling to $190,000; trims benefits for wealthier
beneficiaries; indexes the benefit formula to pay early retirees
less and older retirees more.
•House Republicans: Creates a process under
which Congress would have to address the retirement program's
fiscal problems, but does not propose specific changes.
Defense spending
•Obama: Saves $400 billion over 12 years.
•Fiscal Commission: Cuts several hundred
billion dollars over 10 years from Obama's 2012 budget.
•Bipartisan Policy Center: Freezes spending for
five years, then allows only inflationary increases.
•House Republicans: Cuts about $78 billion over
10 years, $100 billion less than the amount recommended by Defense
Secretary Robert Gates.
Domestic programs
•Obama: Cuts $770 billion over 12 years,
including $400 billion already outlined in his proposed 2012
budget.
•Fiscal Commission: Cuts more than $200 billion
over 10 years.
•Bipartisan Policy Center: Freezes spending for
four years, then allows only inflationary increases.
•House Republicans: Reduces spending for the
next five years to pre-2008 levels.
Taxes
•Obama: Allows tax rates to rise in 2013 and
beyond on individuals with income above $200,000 and couples above
$250,000. Eliminates about $320 billion in tax breaks over 10
years. Sets as a goal lowering individual and corporate tax rates,
without details.
•Fiscal Commission: Eliminates much of the $1.1
trillion in annual special-interest tax breaks; reduces individual
tax rates to 12%, 22% and 28%, and sets a 28% corporate rate; puts
about $100 billion per year toward deficit reduction.
•Bipartisan Policy Center: Establishes a 6.5%
"debt reduction sales tax." Reduces individual tax rates to 15% and
27%, and the top corporate rate to 27%. Eliminates $1.9 trillion in
special-interest tax breaks over 10 years, phases out the exclusion
of employer-provided health benefits, and revises deductions for
mortgage interest and charitable contributions.
•House Republicans: Slashes the top income tax
rate from 35% to 25%. Eliminates some tax breaks but cuts taxes
overall, rather than putting any new revenue toward deficit
reduction.
Deficit
•Obama: Cuts $4 trillion over 12 years,
including $1 trillion already outlined in his proposed 2012
budget.
•Fiscal Commission: Cuts $3.9 trillion over 10
years.
•Bipartisan Policy Center: Cuts $5.9 trillion
over 10 years.
•House Republicans: Cuts $4.4 trillion over 10
years.