Deficit Panel Eyes Deep Social Security Cuts

Updated at 7:12 p.m. ET

The leaders of President Barack Obama's bipartisan deficit commission launched a daring assault on mushrooming federal deficits on Wednesday, proposing reducing annual cost-of-living increases for Social Security, gradually raising the retirement age to 69 and taking aim at popular tax breaks such as the mortgage interest deduction.

As part of a proposal to wrestle $1-trillion-plus deficits under control, their plan would also curb the growth of Medicare. It came a week after voters put Republicans back in charge of the House and told Washington that the government is too big.

CBS News Chief White House Correspondent Chip Reid reports that in the 50-page draft proposal, pain is everywhere:

• The federal workforce would be slashed by 10 percent, or 200,000 jobs;
• More than $100 billion in defense cuts;
• Farm subsidies cut by $3 billion per year.

On Social Security benefits would be reduced for higher incomes and the retirement age would gradually increase from 67 to 69.

Some taxes would be cut, including tax rates for the highest bracket of 35 percent could go as low as 23 percent. Corporate rates would go from 35 percent to as low as 26 percent. The alternative minimum tax intended for upper tax brackets and now hitting the middle class families would be eliminated.

Is Either Party Serious about Cutting the Deficit?

However, the plan by Chairman Erskine Bowles and former Sen. Alan Simpson, the co-chairman, doesn't look like it can win the support from 14 commission members that is needed to force a debate in Congress. Bowles is a Democrat and was former President Bill Clinton's White House chief of staff. Simpson is a Wyoming Republican.

The two were among the first to acknowledge their plan's unpopularity - and to suggest it would be a nonstarter in Congress.

"We'll both be in a witness protection program when this is all over, so look us up," Simpson quipped to reporters. Bowles said: "We're not asking anybody to vote for this plan. This is a starting point."

The White House reserved judgment. "The president will wait until the bipartisan fiscal commission finishes its work before commenting," said White House spokesman Bill Burton. Burton called the proposals "only a step in the process." He said Obama respects the panel's challenging assignment "and he wants to give them space to work on it."

The proposals were floated as the Treasury Department reported that the federal government began the new budget year with a deficit in October that totaled $140.4 billion -- down 20 percent from a year ago but still the third highest October shortfall on record. Even with the improvement, last month's red ink set the stage for what is expected to be a third consecutive year of $1 trillion-plus deficits.

The commission is supposed to report a deficit-cutting plan on Dec. 1, but panel members are unsure at best whether they'll be able to agree on anything approaching Obama's goal of cutting the deficit to about 3 percent of the size of the gross domestic product.

Building the needed support of 14 of its 18 members will be difficult. Cuts to Social Security and Medicare are making some liberals on the panel recoil. And conservative Republicans are having difficulty with the options suggested for raising taxes. The plan also calls for cuts in farm subsidies, foreign aid and the Pentagon's budget.

"This is not a proposal I could support," said panel member Rep. Jan Schakowsky, D-Ill. "On Medicare and Social Security in particular, there are proposals that I could not support."

The plan released by Bowles is only a proposal put forth by him and Simpson. Members of the commission will resume debate on it later Wednesday and next week in a long-shot bid to reach a compromise.

The release of the proposal comes just a week after midterm elections that gave Republicans the House majority and increased their numbers in the Senate. During the campaign, neither political party talked of spending cuts of the magnitude proposed by Bowles, with Republicans simply proposing $100 million in cuts to domestic programs passed each year by Congress.

"It's a very provocative proposal," said a Republican panel member, Rep. Jeb Hensarling of Texas. "Some of it I like. Some of it disturbs me. And some of it I've got to study."

But member Sen. Judd Gregg, R-N.H., called the proposal "an aggressive and comprehensive plan for getting federal spending, deficits and the debt under control. ... This will not be the final proposal, but it is a significant step down the path of establishing fiscal responsibility."

Other proposals by Bowles and Simpson include:

• Increasing the gas tax by 15 cents a gallon to fund transportation programs.

• A three-year freeze in the pay of most federal employees and a 10 percent cut in the federal work force.

• Eliminating all Congressional pet projects, known as earmarks.

[alpha422]

A DEAL BETWEEN THE POLITICAL PARTIES IS ALREADY UNDERWAY BEHIND CLOSED DOORS, NO TRANSPARENCY HERE! PRESIDENT OBAMINATION WILL "RELUCTANTLY" GIVE IN TO THE REPUBLICANS. hAVE WE NOT SEEN THIS BEFORE?
WATCH OUT AMERICA! THE COST OF HAVING A SHAFT SURGICALLY REMOVED FROM OUR LOWER EXTREMITIES WILL RISE DRAMATICALLY UNDER OBAMACARE!!

GREAT IDEA FOR A BUMPER STICKER; "WHO NEEDS TERRORISTS, WE HAVE POLITICIANS!".

[alpha422]

DEFINITION OF THE DIRTY WORD "ENTITLEMENTS" --ANY PROGRAM PAID FOR WITH AMERICAN TAPAYER DOLLARS FOR SERVICES AND A DIRECT BENEFIT TO SAME TAXPAYERS AND NOT USED FOR PORK, EARMARKS,FRAUD, OR CORRUPTION.

NO WONDER OUR POLITICIANS THINK IT IS A DIRTY WORD!
WHO NEEDS TERRORISTS, WE HAVE POLITICIANS!

[alpha422]

Both the republicans and the democrats are following a carefully choreographed script which will end up telling us (the dimwitted public) yhat they have no choice but to cut middle class "entitlements" that we paid for thru years of payrole taxes into a fund which turned out to be the general fund and that money spent on anything but social security. They threaten a government shutdown.
I find it curious that just recently congress passed an extension to the ruinous Bush tax cuts for the wealthy and yet nobody threatened a government shutdown when that was passed! Hmmmm?

[gunsmoke1967]

What is wrong with us we talk like we are beaten before we start we paid into this system it was forced on us we had no choice they took it out of our wages when we were young it is our money not theirs and we were told it was for our future because we would never save and it would give us a decent retirement when we reached the age now here we are and they are trying to twist their lies and lay their guilt on us some of you who never put into to social security system should not dicate to us what we should do. You try and make it sound like it is us who hurt this country. Social Security is for the people of this country . Suggestion if i may i am not a real bright person average but lets get real why is there no talk of cutting foreign aid ? charity begins at home , closing Europen military bases which no longer are needed but costly, I 'll tell you why its much easier to rape social security then to stand up and say to the world we will not be your meal ticket any longer , our country is hurting and we will take care of us first and maybe in a few years 10 or 20 we will begin foreign aid again. That my fellow americans is a real president . The time is coming soon if this is not stopped this country will cease to exisit as The United States of America. We are in debt for so much money our grandchidren will not pay it off thanks to a president who thinks he can spend his way out of every problem he encounters leave my social security alone its mine not yours. Go cut other countries aid not the american peoples aid ( social security ) Also Join AARP I never was much at joining things like that but hey its better then doing nothing and letting them walk all over you at least your voice has a chance of being heard when the boomers speak as one all hell breaks loose )Jim Silver Creek

[whoarethesepeople]

WHY in hell does our country continue to support other countries and deny the programs that will ensure the well-being of its taypaying citizens who obviously have little or no say in how our taxes are being spent. This is a travesity that goes beyond reason. Cutting Social Security, cutting Medicare, reducing the income of elderly citizens makes full circle when they have to go on other welfare based programs in order to have even the basic necessities. Remember, it was our brilliant government who allowed and even perpetuated the downfall of our economic system and the ruin of many hard working retirees portfolios -- now you're ready to take even their slight cost of living increases and Medicare benefits! Shame on you Congress! The voters are watching YOU!

[wwignes]

Two years won't kill Americans seeking social security benefits; it will encourage them to take better care of themselves. Both that cut and the cut to medicare may call for us citizens to take better care of our families, which is something we don't do. And our tax dollars have been making up for our lack of accountability for each others well fare. Think; do you really want the government to be solely responsible for such things? I guarantee such a system is much more easily taken advantage of than one in which people have the responsibility of (I've witnessed a LOT of it first-hand). Better to ask Americans to step up and bare a burden in this respect than to take a hit in such things as education, which could be our saving grace in the future.

[Charlesmconn]

I thought we were going to cut the fat and waste out of the budget, how the deficit commission is saying the whole federal budget is fat and waste! Fat and waste paid for by China, so know the only people who have money to buy our government bonds. So now would it not make sense Dems and Repubs to reduce cost and raise the needed revenue by either having Americans buy the government bonds or pay the taxes needed to fund the government. In other words if Americans want the government to do something, let us pay for it and not borrow the money from foreigners!
Justsan

[slatep]

Congress has been "STEALING" money from Social security for decades.
Now that the time has come to pay the piper; they want to take even more out of this fund.
Go to "Contacting the Congress" on your computer, and write, call or email every last one.
The "grey-haired brigade" had a lot of influence on the last election.!
Even if you are not grey at the moment; do it for your parents and grandparents.
These generations made our country what it is today through blood, sweat and tears.
Every generation of parents in the past will tell you they worked as hard as they did so their children's lives would be better than theirs.

Please don't let Congress or Obama's hand-picked henchmen take this away from those who sacrificed so much and who are willing to put the debt on your shoulders, your children's shoulders and your grandchildren's shoulders.
Ask them to eliminate welfare to illegal aliens.
Tell them to stop foreign aid until our Country gets back on it's feet.
Much of foreign aid goes to Countries who are our enemies.
We are literally enabling these Countries to suck us dry; while continuing to threaten us.
Close our borders for two years. No new immigrants we have to support with our tax money.
MONEY IS POWER.!
Take the power from this bought and paid for Congress and Obama.!!

[endrepubs]

Americans say they want fiscal responsibility but then they always say don't cut MY program. Well cuts need to be made across the board so EVERYONE feels the pain AND at the same time taxes do need to go up, especially on the wealthier Americans who have prospered so richly from policies put in place 30 years ago. We d-a-m-n near have a plutocracy now in America and yes, the wealth of the top few percent of Americans does need to be re-distributed. The top 1% alone now own a mind boggling 24% of the nations total wealth. That is destabilizing, undemocratic and dangerous to the future of America's economic health to have that kind of a concentration of wealth.

[ranco4]

The Federal Budget - Wake up politicians in Washington - You are going to destroy the United States if you keep up deficit spending. You don?t have to be a genius or a rocket scientist to know that you can?t spend more than you make. What happens when mandatory spending and interest payments surpass revenues scheduled 2020 to 2025? Goodby USA?

[lewwaters]

So, once again, a group of multi-millionaires who are allegedly leaders of the country and have made very bad decisions that affect us all, are calling on us to make sacrifices and are recommending taking from those least able to afford it, but they will keep their own.

Democrat, Republican, it no longer matters. Both made these decisions and neither will pay. Even if voted out, they retain the wealth they amassed on our backs.

It's time for drastic changes, beginning with the very people elected to "lead" the country. Cut their salaries and make them part-rime legislators, like many states. Cut their lucrative benefits packages and staff. No more paid for trips overseas. If they need to go, they can pay for it, not us.

States can pay coach airfare for them to travel to D.C. once a year and let them stay in a Motel 6 while Congress is in session.

We have allowed them to set themselves up as a wealthy ruling class and too many have made a career out of it. We have been screwed by both parties and we must turn it back around.

No, this will not cure the problem, but I think it would be a good start. Let's get people who really want to represent the people, no more career politicians living high on the hog and asking taxpayers to sacrifice.