Highlights of proposals by leaders of President Barack Obama's bipartisan deficit commission:
SOCIAL SECURITY
— Increase the Social Security retirement age by one month every two years after it reaches 67 under current law. It would reach 68 around 2050 and 69 around 2075.
— Lower cost-of-living increases.
— Gradually raise the threshold on the amount of income subject to the Social Security payroll tax.
— Give retirees the choice of collecting half their benefits early and the other half at a later age.
TAXES
— Overhaul individual income taxes and corporate taxes. For individuals and families, eliminate a host of popular tax credits and deductions, including the child tax credit and the mortgage interest deduction. Significantly reduce income tax rates, with the top rate dropping to 23 percent from 35 percent.
— Reduce the corporate income tax rate to 26 percent from 35 percent, and stop taxing the overseas profits of U.S.-based multinational corporations.
— Increase the gas tax by 15 cents a gallon to fund transportation programs.
DOMESTIC SPENDING
— Freeze Defense Department salaries and bonuses for three years, and noncombat military pay at 2011 levels for three years. Double Defense Secretary Robert Gates' proposed cuts in defense contracting. Reduce overseas bases by one-third, cut spending for base support and integrate children in military families into local schools.
— Reduce congressional and White House budgets by 15 percent, freeze federal compensation at non-defense agencies for three years, cut the federal work force by 10 percent, eliminate 250,000 non-defense contractors and end money for commercial space flight.
— Eliminate noncompetitive spending bills known as "earmarks."
— End grants to large and medium-sized hub airports; require airports to fund a larger portion of the cost of aviation security.
— Cut funding for the public broadcasting.
HEALTH CARE
— Limit or eliminate altogether the tax-free status of employer-provided health benefits, providing incentives for people to enroll into cost-conscious insurance plans.
— Limit annual cost increases for Medicare and Medicaid, the giant health federal care programs, to no more than 1 percent above the growth rate of the economy. This would be accomplished by rewarding quality instead of sheer volume, demanding rebates from drug companies that want to participate in Medicare and raising cost-sharing for Medicare recipients while limiting their out-of-pocket costs.
— Cap jury awards in malpractice cases.
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