With a Thanksgiving deadline fast approaching, the GOP members of a deficit-reduction supercommittee are pressing a plan to cut the deficit by about $1.5 trillion over the coming decade, showing flexibility on tax revenue increases for the first time while proposing to gradually raise the Medicare eligibility age to 67 for future retirees. The plan floated by Republicans would place sharp limits on the total amount of tax deductions and credits that a person could claim, in exchange for significantly lower income tax rates. At the same time, Republicans are willing to accept a net increase in individual income tax revenues of about $300 billion over the coming decade.
The proposal also would cut spending by about $700 billion, mixing a less generous cost-of-living adjustment for Social Security beneficiaries with further cuts to agency operating budgets and curbs to the booming growth of Medicare and the Medicaid health care program for the poor and disabled. Aides to supercommittee Democrats attacked the proposal, saying the GOP plan for a top individual tax rate of 28% would give wealthier earners large tax cuts while sharply cutting back tax breaks important to middle-class workers such as deductions for mortgage interest and state and local taxes. And they said the proposed tax increases were too small when measured against the nation's huge debt. (Read more super committee stories.)