President Barack Obama gave his endorsement Tuesday to a deficit reduction plan offered by a bipartisan group of six senators, but cautioned, "There are still going to be a lot of difficult negotiations."
The â€œGang of Sixâ€ plan would:
- Aim to reduce deficits by $3.7 trillion over ten years;
- Call for the elimination of some tax deductions and preferences and the reduction of others, raising $1 trillion in new revenue, while also reducing marginal income tax rates to as low as 23 percent for high earners;
- Require $145 billion in cuts to national defense and homeland security operations and hundreds of billions in cuts to other federal departments;
- Shift to a new measure of inflation called â€œchained CPIâ€ which would have the effect of reducing future Social Security benefits by mandating smaller annual cost-of-living adjustments.
Big unknowns remain:
- Would Boehner, Cantor and a majority of the House GOP caucus vote for a plan which aims to raise revenues through eliminating tax deductions and preferences?
- Which taxpayers would end up paying more if the plan were to become law?
- Exactly what cuts in future benefits would the plan make in Medicare and Social Security?
- How much opposition would progressive and liberal groups generate to the plan, especially among House Democrats?
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