President Barack Obama's nonpartisan debt-reduction commission released its final plan today, called "The Moment of Truth," with a goal to achieve nearly $4 trillion in deficit spending by 2020. The president organized the commission in February to deal with the ballooning deficit, which is expected to top $1.3 trillion this year.
"America cannot be great if we go broke," co-chairmen Erskine Bowles and Alan Simpson said in the final report.
The plan takes direct aim at the nation's tax code, proposing sweeping changes across the board in an effort to both simplify it and avoid losing billions in "backdoor" taxes. The commission proposes taxing capital gains and dividends at normal income rates (they are currently taxed at 15%), eliminating the Alternative Minimum Tax and increasing gasoline taxes by 15 cents a gallon. The plan calls for capping mortgage-interest deductions and offering no credit for mortgage interest from a second home.
It also calls for lowering corporate taxes.
Read the official report here
The plan also calls for the elimination of 200,000 federal jobs by 2020, as well as cuts to Medicare and increasing the normal retirement age to 68 by 2050.
Sen. Jedd Gregg (R-NH) and Sen. Kent Conrad (D-ND) today expressed their support for the plan, but the proposal has generated a firestorm of criticism from Democrats and Republicans alike, as well as from a growing number of special interest groups.
A vote on the plan was originally set for today; it has been rescheduled for Friday. At least 14 of the 18 panel members need to approve the plan in order for it to move to Congress.
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