New Coalition Announces Deficit-Elimination Plan
WASHINGTON — A BIPARTISAN group of prominent Americans calling itself the Strengthening of America Commission has proposed a plan to reduce government spending, invest in growth, and reshape the income-tax system in the hope of balancing the budget in a decade.
The blueprint calls for $1.5 trillion in spending cuts and $376 billion in increased tax revenues.
The plan would throw out the current system of taxing individual income. It would replace that with an annual tax on what people earn, minus the money they save. This would encourage saving, which is vital to economic growth, the report said.
To push the economy in the right direction, the plan calls for the investment of $160 billion on education, research, technology, and children's programs, and an additional $100 billion to build roads and other public works projects. They leave decisions on which programs would be cut for Congress and the president.
An additional $387 billion would be saved because the plan would reduce government borrowing, the authors said.
The proposal would:
* Gradually slow the growth of Medicare and other benefit programs, excluding Social Security.
* Hold spending on domestic initiatives, excluding benefit programs, to 9 percent below currently projected levels.
* Cut defense 10 percent below current plans.
* Limit foreign aid to increases at half the inflation rate.