Tags: Debt Panel Rejects 3.8 Trillion Budget-Cutting Plan

Debt Panel Rejects $3.8 Trillion Budget-Cutting Plan

Friday, 03 Dec 2010 11:33 AM

President Barack Obama’s debt commission rejected a plan to cut $3.8 trillion in spending as members from both political parties opposed its mix of tax increases and cuts in programs such as Social Security and Medicare.

The seven votes against the proposal were enough to reject it, even though 11 of the 18 members voted in favor, because 14 votes were needed to forward the plan to Congress for consideration. Five of the six senators on the panel backed the plan, while five of the six House members voted no.

“This plan will make an important first step forward in proving something, in proving our nation understands the peril of our ever increasing deficits and that our leaders are prepared to do something real,” said panel co-chairman Erskine Bowles before commission members began announcing their votes.

The plan won support from Democratic Senators Dick Durbin of Illinois and Kent Conrad of North Dakota and Republican Senators Mike Crapo of Idaho, Tom Coburn of Oklahoma and Judd Gregg of New Hampshire. Still, other Democrats opposed the proposed steep cuts to Medicare and Social Security while Republicans said it would impose tax increases without cutting enough health-care spending.

The proposal would reduce the annual deficit to about $400 billion in 2015, from this year’s $1.3 trillion, and start reducing the debt.

‘Progressive Voices’

Durbin of Illinois, the Senate’s second-ranking Democrat, said he voted for the plan even though he opposed many of its provisions.

“I want progressive voices at the table arguing that we must protect the most vulnerable” when tough budget decisions are made, Durbin said. He said the proposal was “meant to kick- start an adult debate” on cutting the deficit.

Representative John Spratt, a South Carolina Democrat, said he was voting for the plan and added, “thank God I’m not running again.”

The plan, proposed by Bowles and co-chairman Alan Simpson, would increase taxes $1 trillion by 2020 by scaling back or eliminating hundreds of tax deductions, exclusions and credits such as those letting homeowners write off interest on their mortgage payments.

It would cut Social Security benefits, raise the gas tax by 15 cents, reduce discretionary spending by $1.6 trillion and cut Medicare by more than $400 billion.

Farm Subsidy Cuts

Senator Max Baucus, a Montana Democrat and panel member, said yesterday he would vote against the plan because he opposed cuts to farm subsidies. He also said reductions in Social Security and Medicare would disproportionately hurt rural states because they have larger numbers of older residents.

Representative Jeb Hensarling, a Texas Republican, said yesterday he opposed the plan because it “does not address health care in a meaningful way.”

The spotlight now shifts to the White House, where Obama must decide how much of the report to include in his next budget proposal. Obama created the commission in February by executive order after the Senate defeated an effort to do it through legislation.

Voters consider the federal deficit and government spending the second most pressing issue facing the country, after unemployment, a Bloomberg National Poll in October showed.

A group of 14 Democratic senators not serving on the commission sent a letter to the White House and congressional leaders urging them to move forward on some of the proposals in the report regardless of the outcome of the panel’s vote.

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President Barack Obama s debt commission rejected a plan to cut $3.8 trillion in spending as members from both political parties opposed its mix of tax increases and cuts in programs such as Social Security and Medicare. The seven votes against the proposal were enough to...
Debt Panel Rejects 3.8 Trillion Budget-Cutting Plan
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2010-33-03
Friday, 03 Dec 2010 11:33 AM
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