Peter G. Peterson, chairman of the Peter G. Peterson Foundation, said it “provides a strong framework for the tough choices that we will need to make as a nation.”
Perhaps the most celebrated part of the entire plan is the recommendation to simplify and broaden the tax base by eliminating or scaling back $1.1 trillion in annual tax breaks to help offset the cost of lowering individual and corporate tax rates.
Under the plan, corporate tax rate drops from 35 percent to 26 percent and the six individual income tax rates (currently ranging from 10 percent to 35 percent annually) are boiled down to into three annual brackets: 8 percent up to $70,000; 14 percent up to $210,000; and 23 percent for people earning more.
“If anything, the concept that tax reform ought to be merged with budget reform is something that is incredibly important,” Mr. Ryan said.
The plan also calls for capital gains and dividends to be taxed at normal tax rates, and for the employer-provided health insurance credit to be gradually phased out by 2038. To curb health care costs, the proposal would reform or repeal multiple parts of Medicare, including to the so-called “doc fix” and the Community Living Assistance Services and Supports (CLASS) Act.
As for Social Security, the plan aims to gradually make the retirement-benefit formula more progressive by reducing benefit growth, particularly for high earners, and increasing the baseline benefit for low-wage workers, making it no less than 125 percent of the poverty line in 2017.
The plan would increase benefits for the elderly and disabled, and raise the national retirement age from 67 in 2027 to 68 by 2050 and 69 by 2075. It also would gradually increase the amount of income subject to Social Security taxes from $106,000 to $190,000 by 2020.
Friday’s vote ultimately will depend on the likes of Sen. Tom Coburn, the Oklahoma Republican who delivered an impassioned speech to the panel Wednesday, but played it close to his vest on whether he would back the plan.
“History says we’re not going to make it,” Mr. Coburn told the commission. “And the way we cheat history is for all of us to give up something. Everybody at this table give up something. And then, the way forward for America is for everybody to start sacrificing so we create a future that honors the tremendous sacrifice that came before us.”
The report calls for a three-year pay freeze for members of Congress and federal workers - including the Defense Department’s civilian work force.
It calls for a 200,000-person reduction in the government work force through attrition, a ban on earmarks and a 15-cent-a-gallon increase in the federal gas tax to help pay for transportation projects.
Others who supported the plan, included David Cole, chairman and chief executive of Honeywell International Inc., and Alice Rivlin, former budget director under Mr. Clinton. Ann Fudge, a former executive of Young and Rubicam, also is expected to support the plan.