Social Security, Medicare, Pentagon slashed by deficit commission
Under the proposal, Medicare spending, Social Security, the Pentagon's budget, and earmarks would be curtailed in a plan that cuts $3 in spending for every $1 in tax increases.
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A proposal released Wednesday by the bipartisan leaders of President Barack Obama's deficit commission suggested cuts to federal Social Security pension benefits, deep reductions in federal spending and higher taxes for millions of Americans to stem a flood of red ink that they said threatens the country's very future.
Interest groups on the right and the left squealed, predictably, about the plan, which would cut total deficits by as much as $4 trillion over the next decade — much of it from programs long considered all but sacred.
Besides Social Security, the Medicare health care program for the poor would be curtailed. Tax breaks for many health care plans, too. And the Pentagon's budget as well in a plan that couples $3 in spending cuts for every $1 in tax increases.
The full commission has yet to make recommendations, and the chairmen acknowledged their plan was dead on arrival — but said it would prompt a more realistic national debate about what it'll take to solve the nation's fiscal woes.
Obama, in Seoul, South Korea, declined to comment on the commission's work but said, "We're going to have to take actions that are difficult and we're going to have to tell the truth the American people." He said there was a lot of rhetoric about the country's debt and deficits but that "a lot of the talk didn't match up with reality."
"We need to be straight with the American people," the president said. "We can't just engage in political rhetoric."
Sen. Kent Conrad, the Democratic chairman of the Budget Committee and a member of the White House commission, said the U.S. faces the real possibility of becoming a "second-tier economic power" if it fails to address the trillion-dollar-plus deficit.
Conrad said simply cutting waste and fraud will not solve the problem, and insisted changes to Medicare and Social Security were needed because both programs are headed toward insolvency.
"People can say we want to keep 'what is.' 'What is' is not affordable," Conrad said Thursday on ABC television.
For all the pain, the deficit still would approach $400 billion in 2015 under the proposal, released by deficit panel's co-chairmen, Democrat Erskine Bowles, a former Clinton White House chief of staff, and Republican Alan Simpson, a former U.S. senator.