President Barack Obama’s debt commission will be voting today on recommendations on how “best” to attack the national deficit. CNN has pulled together a good synopsis of what’s on the table and outlined in the Bowles-Simpson plan. The four key “flash points” of the plan include Social Security, defense spending, the mortgage-interest deduction and the spending-versus-taxes debate. The commission recommends raising the retirement age from 65 to 67, with hardship exemptions for those who cannot work past the early-retirement age of 62. Bowles-Simpson calls for raising the cap on earnings subject to the Social Security payroll tax — currently $106,800 — so that within 40 years the tax would apply to 90 percent of total earnings in the country. That’s how much income was subject to the tax in 1983, the last time Congress reformed Social Security. It also wants to cut defense spending and reduce tax breaks, including mortgage reductions, which would become credits.
The major issue of the recommendations is how heavily should policymakers rely on spending cuts versus increases in tax revenue — the latter resulting from new taxes, higher rates or a reduction in tax breaks. With the recent announcement of extending tax cuts to all Americans, it looks as if that quagmire has been solved. If they raise the retirement age any higher, black men will be literally dying on the job because of a short life expectancy. We suppose we’re not supposed to retire or benefit from our Social Security contributions. We won’t even touch the mortgage-interest “deduction” issue. And yet another reason to think twice before buying a house. Interesting stuff. Let’s see how it plays out.
Read more at CNN.