Members of a congressional supercommittee are weighing a Republican proposal to overhaul the U.S. tax code and limit some individual deductions to help pare the federal deficit, according to an aide familiar with the panel’s deliberations.
The proposal would limit the use of some individual tax breaks mostly used by those in the upper brackets, including the deduction for mortgage interest for a second home, said the aide, who wasn’t authorized to speak publicly. The revenue generated would be used to lower marginal income tax rates and to cut the deficit, the aide said.
The panel faces a Nov. 23 deadline to recommend a debt- reduction plan of at least $1.2 trillion to be voted on by Congress by Dec. 23. Failure to enact a plan would trigger $1.2 trillion in across-the-board domestic and defense spending cuts in 2013.
The aide said other aspects under discussion include cuts in spending on Medicare and other programs, and a change in the way the government measures inflation. A change in the inflation measure would result in smaller cost of living increases for government beneficiaries and some tax increases.
Senator John Kerry of Massachusetts, a Democrat on the supercommittee, criticized the Republican concept.
“Whatever they put there doesn’t get the job done,” he told reporters in Washington. “I would not characterize it as substantial but it is a change,” he said, adding that “we have some distance to travel.”
Senator Patty Murray of Washington, the Democratic co- leader of the supercommittee, declined to discuss the panel’s deliberations though she also said, “I have yet to see a real, credible plan that raises revenue in a significant way to bring us to a fair and balanced proposal.”
Republicans have resisted increasing taxes as part of a debt-reduction plan. Democrats have been unwilling to consider cuts in spending on entitlement programs such as Medicare without agreement from Republicans to raise more tax revenue.
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