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Title: What 'Gang of Six' plan would do ($4 trillion reduction)
Source:
CNN
URL Source: http://money.cnn.com/2011/07/19/news/economy/gang_of_six_budget/
Published: Jul 19, 2011
Author: CNN
Post Date: 2011-07-19 19:47:32 by go65
Keywords: None
Views: 3077
Comments: 8
NEW YORK (CNNMoney) -- It's hardly a done deal. And there's absolutely no guarantee the no-taxes- ever conservatives in the House will go for it. But a debt-reduction framework put forward on Tuesday by the bipartisan Gang of Six in the Senate injected new hope that the ongoing stalemate in the debt ceiling negotiations might be broken. Before reviewing the specifics of the plan, President Obama gave it an early nod of approval. "The framework is broadly consistent with what we've been working on here in the White House and with the presentations that I've made to the leadership when they've come over here," he told reporters. The Gang of Six plan got a positive reception from a bipartisan group of more than 40 senators earlier on Tuesday. "This is the moment because everybody sees the process drifting towards a kick-the-can down the road response, which is embarrassing," Sen. Joe Lieberman, an independent, told CNN's Ted Barrett. Deficit hawks were cautiously optimistic. "If enough lawmakers are willing to step up to the plate along with the Gang, it would renew our chances of getting a 'grand bargain' sufficient to reassure markets ... and to reassure the public that Washington is still fit to govern," said Maya MacGuineas, president of the Committee for a Responsible Federal Budget. The two co-chairmen of Obama's debt commission -- Erskine Bowles and Alan Simpson -- concurred. "Pray for the Gang of Six," they said in a statement. The Gang's framework -- in the making for seven months and modeled on the Bowles-Simpson plan -- calls for a two-step legislative process that would first reduce deficits by $500 billion and then implement a larger comprehensive debt-reduction plan. According to an outline from Senate sources, the framework would: Shave roughly $4 trillion off debt load: Broadly, the framework would reduce annual deficits over the next 10 years by $3.7 trillion (or $4.7 trillion depending what it's measured against). By 2021, the country's publicly held debt would fall to roughly 70% of GDP, which is the level it's approaching this year. Reform the tax code: The plan would eliminate some tax breaks, reform others, halve the number of income tax brackets to three from six, and reduce rates. The rate on the new brackets would fall between 8% and 12% for those in the lowest bracket; 14% and 22% for those in the middle bracket; and 23% and 29% for those in the top bracket. Rates today run from 10% on the low end to 35% on the high end. The framework also calls for the repeal of the Alternative Minimum Tax -- often called the "wealth" tax, which threatens to hit the middle class in increasing numbers every year because of how it's set up. The Gang of Six asserts that its tax reform plan overall would result in net tax relief of $1.5 trillion over 10 years, although there is no third-party analysis available to verify that. And any tax reform effort must be geared to spur economic growth. Cut spending: In the near-term, the Gang of Six framework would reduce $500 billion in debt over 10 years. While the plan is silent on the issue of raising the debt ceiling, that down payment presumably could be paired with an increase in the debt ceiling, which must be raised within two weeks. Down payment measures include imposing statutory discretionary spending caps through 2015, selling unused federal property and changing how cost-of-living adjustments to government payments and tax brackets are calculated. There would be some exceptions, such as postponing the formula change for Supplemental Security Income for five years and then phasing it in over the next five years. SSI goes to seniors and disabled people with very low incomes.
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#1. To: go65 (#0)
(Edited)
My understanding is that the tax hikes are up front, but there is only a lousy $500 billion (over 10 years) "down payment" on the alleged spending cuts. The rest of the spending "cuts" will supposedly to be decided at some future date. They will never materialize. Even if they did, it wouldn't balance the budget. This tells me that the proposal is just the same old Democrat game and should be Dead on Arrival. It's not a serious proposal for closing the deficit.
It should. But never underestimate the stupidity of republicans
This tells me that the proposal is just the same old Democrat game and should be Dead on Arrival. Your understanding is usually wrong (see the Greece thread), Saxby Chamblis was just on CNN defending this plan.
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I have no idea who this is. If he's a Republican, then he's getting suckered in like his predecessors.
Republican Senator from Georgia and one of the gang of six. The GOP has the opportunity to embrace $4 trillion in deficit reduction, or simply go the McConnell route and do nothing. Let's see what route they take.
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No, this is just the Democrats suckering the GOP once again. Here's how this will play out: A.) They will raise taxes by $1 trillion, make a $500 billion "down payment" on the cuts, with promises that $2.2 trillion cuts will be made later. B.) The $2.2 trillion in cuts won't be made. Instead, the Democrats will go back to demagoging about how the "rich" are not paying their fair share of taxes. We've see this before from them. They are untrustworthy. If they GOP wants to sign onto a deal that cuts spending by $2.7 trillion and raises taxes by $1 trillion, then the cuts have to be made up front. Otherwise forget it.
I really don't know where you get any of your information, but it is almost always entirely wrong. Obama hasn't proposed raising any revenues until the end of 2012 when the Bush tax cuts expire.
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And yet you put your faith in those who gave us $30 billion in "cuts" that turned out to be around $240 million?
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To preserve our independence, we must not let our rulers load us with perpetual debt. We must make our election between economy and liberty, or profusion and servitude. — Thomas Jefferson
#2. To: jwpegler (#1)
This tells me that the proposal is the same old Democrat game and should be DOA.
#3. To: jwpegler (#1)
My understanding is that the tax hikes are up front, but there is only a lousy $500 billion (over 10 years) "down payment" on the alleged spending cuts. The rest of the spending "cuts" will supposedly to be decided at some future date. They will never materialize. Even if they did, it wouldn't balance the budget.
#4. To: go65 (#3)
Saxby Chamblis was just on CNN defending this plan.
To preserve our independence, we must not let our rulers load us with perpetual debt. We must make our election between economy and liberty, or profusion and servitude. — Thomas Jefferson
#5. To: jwpegler (#4)
I have no idea who this is. If he's a Republican, then he's getting suckered in like his predecessors.
#6. To: go65 (#5)
(Edited)
The GOP has the opportunity to embrace $4 trillion in deficit reduction
To preserve our independence, we must not let our rulers load us with perpetual debt. We must make our election between economy and liberty, or profusion and servitude. — Thomas Jefferson
#7. To: jwpegler (#6)
.) They will raise taxes by $1 trillion, make a $500 billion "down payment" on the cuts, with promises that $2.2 trillion cuts will be made later.
#8. To: jwpegler (#6)
B.) The $2.2 trillion in cuts won't be made. Instead, the Democrats will go back to demagoging about how the "rich" are not paying their fair share of taxes.
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