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"Gang of Six" Senate Bipartisan Proposed Plan - Solving the Debt Ceiling Standoff - Draft

"Gang of Six" Senate Bipartisan Proposed Plan - Solving the Debt Ceiling Standoff - Draft

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Published by: Zimvi on Jul 19, 2011
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05/25/2014

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ABIPARTISANPLANTOREDUCEOURNATION'SDEFICITSEXECUTIVESUMMARYThisbipartisan,comprehensive,andbalanced.planconsistentwiththerecommendationsoftheBowles-Simpsonfiscalcommissionthatwill:Slashournation'sdeficitsby$3.7trillion/$3.6trillionovertenyearsunderCBO'sMarch2011baseline,or$4.65trillion/$4.5trillionundertheoriginalfiscalcommissionbaseline(whichusedthePresident's2011budgetrequestasthestartingpointfordiscretionaryspending).Stabilizeourpublicly-helddebtby2014.Reduceourpublicly-helddebttoroughly70%ofoureconomyby2021.Imposeunprecedentedbudgetenforcement.ACOMPREHENSIVEANDBALANCEDPROPOSALTheplanusesatwo-steplegislativeprocess:(1)aninitialbillthatmakesimmediatecuts;and(2)aprocessforasecondbilltoenactcomprehensivereformandputournationonastablefiscalpath.Theplanwould:
Immediatelyimplementaggressivedeficitreductiondownpayment
Cutdeficitsby$500billion.
Dramaticallycutdiscretionaryspending
Cutnonsecurityandsecuritydiscretionaryspendingover10years.Maintaininvestmentsthatencourageeconomicgrowth,strengthenthesafetynetforthosewhotrulyneedit,andpreserveastrongnationaldefense.
Carefullystrengthenthesolvency
of
ourmostimportantentitlementprograms
SpendhealthcaredollarsmoreefficientlyinordertostrengthenMedicareandMedicaid,whilemaintainingthebasicstructureofthesecriticalprograms.FullypaysforSGR(the"docfix")over10years.
Fundamentallyreformourtaxcode
Reducemarginalincometaxratesandabolishthe$1.7trillionAlternativeMinimumTax.Encouragegreatereconomicgrowth.EnhancethecompetitivenessofAmericanbusinessesandworkersagainstglobalcompetition.Reformspendingthroughthetaxcodetoeliminateinvestmentdistortionsandtaxgaming.ChangethedebateabouttaxesinAmericafromratelevelsandcarveoutstocompetitiveness,fairnessandgrowth.IfCBOscoredthisplan,itwouldfindnettaxreliefofapproximately$1.5trillion.
Strictlytightenthegovernment'sbudgetprocesses
Imposespendingcapsandsecurity/nonsecurityfirewalls.SequesteraccountsattheendoftheyeartorecoupanyexcessivespendingbyCongress.Restricttheuseofemergencydesiqnatlonsthatcircumventthespendingcaps.PreventCong~essfromexceedingthecapsbyrequiringastand-aloneresolutionsubjecttoa67-votethreshold,inordertoisolatethatvotetoincreasethedeficitfromanyotherpolicyitems.
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ReformSocialSecurityforfuturegenerations
Ensure7S-yearsolvencyofSocialSecurityandprovideforadecennialreviewoftheprogramtoensureitremainssolvent.ReformSocialSecurityonaseparatetrack,isolatedfromdeficitreduction-anysavingsfromtheprogrammustgotowardssolvency.
2
 
ANAGGRESSIVEPLANTHATINVOLVESTHEWHOLECONGRESSTheplanwouldbeimplementedthroughanopen,aggressivetwo-steplegislativeprocessledbycommitteesofjurisdictionandinvolvingtheAmericanpeopleby:
Enacting
a
$500billiondownpaymentthatwouldsecureimmediatedeficitsavings,whileestablishing
a
fasttrackprocessforthecommitteesinCongress
to
specifyfurthersavings
Imposestatutorydiscretionaryspendingcapsthrough2015.Implementnumerousbudgetprocessreforms.Shifttothechained-CPI(amoreaccuratemeasureofinflation)government-widestartingin2012,alongwiththefollowingspecificationsforSocialSecurity:(1)exemptSSIfromtheshiftforfiveyears,andthenphaseintheshiftoverthenextfiveyears;and(2)provideaminimumbenefitequalto125%ofthepovertylineforfiveyears.
(Accordingto
cao,
theshifttochained-CPIwouldresultintheannualadjustmentgrowing,onaverage,about0.25percentagepointsperyearslowerthanthecurrentCPl.)
RepealtheCLASSAct.Enactconcretepolicychangesthatlock-inadditionalsavings,includingfreezingCongressionalpayandsellingunusedfederalproperty.RequireGAOandtheDepartmentofLabortoreporttoCongressonestablishingamoreeffectiveunemploymentinsurancetrigger.
Enacting
a
comprehensivedeficitreductionplanthatincludesdiscretionaryandentitlementsavings
as
well
as
fundamental
tax
reform
Requirecommitteestoreportlegislationwithinsixmonthsthatwoulddeliverrealdeficitsavingsinentitlementprogramsover10yearsasfollows:.'FinancewouldpermanentlyreformorreplacetheMedicareSustainableGrowthRateformula($298billion)andfullyoffsetthecostwithhealthsavings,wouldfindanadditional$202billion/$85billioninhealthsavings,andwouldmaintaintheessentialhealthcareservicesthatthepoorandelderlyrelyupon.ArmedServiceswouldfind$80billion.Health,Education,Labor,andPensionswouldfind$70billion.HomelandSecurityandGovernmentAffairswouldfind$65billion..Agriculturewouldfind$11billionwhileprotectingtheSupplementalNutritionAssistanceProgram.Commercewouldfind$11billion.Energywouldfind$6billionandmayproposeadditionalpoliciestogeneratesavingsthatwouldbeappliedtotheinfrastructuredeficitortoreducethedeficit.Judiciarywouldfindanunspecifiedamountthroughmedicalmalpracticereform.RequiretheFinanceCommitteetoreporttaxreformwithinsixmonthsthatwoulddeliverrealdeficitsavingsbybroadeningthetaxbase,loweringtaxrates,andgeneratingeconomicgrowthasfollows:Simplifythetaxcodebyreducingthenumberoftaxexpendituresandreducingindividualtaxrates,byestablishingthreetaxbracketswithratesof8-12percent,14-22percent,and23-29percent.Permanentlyrepealthe$1.7trillionAlternativeMinimumTax.Taxreformmustbeprojectedtostimulateeconomicgrowth,leadingtoincreasedrevenue.Taxreformmustbeestimatedtoprovide$1trillioninadditionalrevenuetomeetplan
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