The Gang of Six deficit reduction plan introduced today promises $3.7 trillion in cuts over 10 years. Only $500 billion of those cuts, however, would be made immediately as part of a bill to raise the debt limit.The rest are guidelines for congressional committees to take up later this year, with no guarantee they will remain in their current form, or provide the level of deficit reduction advertised.
“There is not a final agreement on the gang of six plan – rather an agreement on a framework for what could become a plan,” Max Gleischman, a spokesman for Senator Dick Durbin (D-IL), told Business Insider. Tax reform “will not be part of a deal to get us through the August 2nd deadline,” he added.
The executive summary released by the group lists only six areas for immediate deficit reduction, including a switch to the chained-CPI beginning in 2012 (for more details see below), and the repeal of the CLASS Act — an insurance program providing long term coverage for families in the event a relative becomes disabled.
The rest of the five page document establishes “a fast track process for the committees in Congress to specify further savings.”
These tentative changes include repealing the Alternative Minimum Tax and establishing three simple tax brackets for individuals, while cutting “tax expenditures” and adjusting the corporate tax rate to between 23 per cent and 29 per cent.
Social Security reform would only be considered if the full deficit reduction package is passed.
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