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Federal deficit reduction plan met with immediate opposition


A plan offered by the leaders of President Barack Obama’s commission to reduce the federal deficit might work. It just isn’t likely to happen, according to Bloomberg.

The co-chairmen proposed a $3.8 trillion deficit-cutting plan yesterday that would trim Social Security and Medicare, reduce income-tax rates and eliminate tax breaks, including the mortgage-interest deduction. It would reduce the annual deficit from $1.3 trillion this year to about $400 billion by 2015 and start reducing the $13.7 trillion national debt.

“Mathematically it apparently works,” said Stan Collender, a former Democratic House and Senate budget analyst and managing director of Qorvis Communications LLC in Washington, D.C., in an interview with Bloomberg. “Politically, it is going to have a lot of trouble getting support from more than just the two co-chairs.”

The plan would raise the gasoline tax, slash defense spending and farm subsidies and bring down health-care costs by clamping down on medical malpractice suits. The Social Security retirement age would rise to 68 in about 2050 and 69 in about 2075.

Outgoing Democratic House Speaker Nancy Pelosi called the targeting of Social Security and Medicare “simply unacceptable,” and Republican Rep. Jeb Hensarling of Texas expressed opposition to proposals to raise taxes.

Obama, in Seoul, South Korea, as part of a 10-day tour of Asia, said he had yet to read the plan and that critics should withhold their judgment until the final report.

“Before anybody starts shooting down proposals, I think we need to listen; we need to gather up all the facts,” Obama said at a press conference.

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