Deficit Commission Slashes Taxes For Wealthy, Corporations, While Raising Retirement Age And Cutting Spending

By Ryan Grim for Huffington Post –

WASHINGTON — The president’s deficit commission report, scheduled for a vote by the full panel on Friday, proposes to slash tax rates for corporations and for high earners. The top tax rate is currently 35 percent and is scheduled to rise to 39.6 percent in 2011. The commission would cut that rate to between 23 and 28 percent, while shaving between seven and nine points off the corporate rate. The commission also proposes medical malpractice reform, a long-term goal of the GOP.

The commission also addresses Social Security, though the program does not contribute to the deficit. The commissioners would raise the full retirement age to 69 gradually and the early retirement age to 64.

Social Security would be tilted toward a welfare program rather than a social insurance system if the commission’s recommendation to provide poorer seniors with a “special minimum benefit” is enacted into the law.

The commission had been scheduled to vote on the proposal as required by law on Wednesday, but the vote has been pushed to Friday, suggesting that the commissioners lack the 14 of 18 votes needed to approve it. Some conservatives intend to oppose the bill, including Rep. Paul Ryan (R-Wisc.), who is widely respected on fiscal issues by his House colleagues.

Rep. Xavier Becerra (D-Calif.), meanwhile, told HuffPost on Tuesday that if the plan kept the same “anemic” revenue approach – cutting taxes for the wealthy – he and other progressives would oppose it. The plan released today differs little in that respect from the one offered recently. “Their proposal on the revenue side was anemic. I’ve said that to both Alan and to Erskine,” he said, referring to the co-chairs, Republican Alan Simpson and Democrat Erskine Bowles.

The proposal would also slash spending across the board. Becerra said he objected to what he called “this meat-axe approach of just making across the board cuts and assigning the pain 50-50 to schools and environmental clean up and senior housing, along with defense programs or wasteful security programs that are very expensive.”

“I have a real difficult time saying that, DOD, unknown to us where their problems are, should have to pay X amount for its wasteful spending and our schools will pay the price at this commensurate rate, even though there may not have been any sign of wasteful spending on the part of our schools. Now, maybe there is, but I say target that instead of using the meat-axe. That’s the biggest concern I have with their approach on the discretionary side,” he said.

The commission meets Wednesday to discuss the proposal.