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$4 Trillion Package of Spending Cuts and New Taxes Proposed

Commission calls this a "moment of truth"

"We are not balancing the books of America on the backs of poor Social Security recipients. That's babble," Simpson says.

Seniors also would be affected by the plan's proposal to kill off or scale back a new federal long-term care insurance program called CLASS. And future retirees earning a medium income — about $43,000 today — would get smaller benefit checks, compared with current law. But seniors in physically demanding jobs would be able to retire earlier with less of a penalty.

Medicare recipients would face a new $550-a-year deductible and 20 percent coinsurance that they would have to pay out of their own pockets. Supplemental insurance would not be able to cover all those costs, as a way to discourage overuse of medical services.

Sen. Dick Durbin, D-Ill., a member of the panel, says he can't say whether he will vote for the package on Friday, but he does support the higher retirement age for Social Security benefits even though it is anathema to liberals. He likens serving on the panel to volunteering for a root canal.

Even the panel members who promised to vote for the measure said Wednesday they were pained by parts of the massive plan. Simpson, for instance, said cutting some of the $1.1 trillion in annual tax breaks was difficult for him. The tax breaks cited for cuts include farm subsidies, interest on mortgages of more than $500,000 or those for second homes, and employer-sponsored health benefits.

Bowles says they chose to stick with a broad plan to solve the nation's fiscal crisis instead of a smaller package that might garner the 14 votes needed to force a vote in Congress. "We are not interested in 14 votes for a whitewash," Bowles says.

Rep. Paul Ryan of Wisconsin, who will chair the Budget Committee when Republicans take control of the House in January, rattled off a list of items he opposes in the plan but said he will propose some of the provisions in Congress next year himself. Ryan favors repeal of the Obama health care overhaul and says he is disappointed the panel did not tackle the topic because growing health care costs are adding to the deficit: "If health care is not on the table, you are not fixing the problem."

Beginning in 2020, the panel would limit the federal government's increase in health care spending — for all programs including Medicare and Medicaid — to just 1 percent more than the rate of economic growth. In recent years, medical costs have skyrocketed.

While many interest groups — from the AFL-CIO to the Heritage Foundation — objected to the proposal, it won praise from the budget-balancing group Concord Coalition, led by Robert L. Bixby.

"If everyone holds out for their own version of perfection, we will never be able to get beyond partisan gridlock," Bixby said. "The deficit and debt will grow, public frustration will build and future generations will get stuck with the bill."

Tamara Lytle is a Washington-based reporter.

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