Obama budget panel proposes health and defence cuts

Image caption,
Erskine Bowles, front, said he and Alan Simpson were not asking for a vote on their proposals

A panel set up to generate plans for trimming the US budget deficit has proposed a series of tough measures including cutting Social Security rises and raising the retirement age to 69.

The commission, set up by President Barack Obama, set out $200bn (£125bn) in potential cuts aimed at reducing the $1.3tr US budget deficit.

The draft report suggests slashing public health and defence spending.

Its contents are unlikely to progress to Congress for debate, analysts say.

The plan, put forward by the commission's co-chairmen Erskine Bowles, a former White House aide to Bill Clinton, and former Republican Senator Alan Simpson, comes a week after Republicans pledging to cut spending took control of the US House of Representatives in the mid-term elections.

The two say it would shave nearly $4tr from US budget deficits by 2020, through a combination of spending cuts and changes to the US tax code.

They were among the first to acknowledge their plan's unpopularity. But analysts say the proposal illustrates the hard choices ahead if the US intends to balance the budget.

"We'll both be in a witness protection programme when this is all over, so look us up," Mr Simpson joked to reporters.

Mr Bowles said: "We're not asking anybody to vote for this plan. This is a starting point."

The BBC's Paul Adams in Washington says the commission's two leaders believe they have done their job: cutting through the vacuous political rhetoric surrounding ways to tackle the deficit and giving politicians some genuine proposals to chew on.

Sticking points

The draft proposals include cuts to Social Security and Medicare, a government-sponsored healthcare programme for the elderly, and tax increases, including a rise in the petrol tax.

Among other likely sticking points is a proposal to raise the retirement age to 68 by 2050 and 69 in 2079, with an exemption for those unable to work past 62.

Other proposals include:

  • Cutting the federal government work force and freezing salaries for three years
  • Slowing growth in foreign aid spending, mostly by slashing Mr Obama's proposed increases in humanitarian and international development assistance
  • Eliminating all Congressional earmarks, which are non-competitive grants members of Congress allocate to projects and organisations in their constituencies
  • Reducing military procurement spending

Below is a selection of your comments

The US has for many years been led down the garden path by its politicians. They promised benefits that were unsustainable due to their failure to raise the revenues needed to pay for them. Sooner or later, this government "Ponzi scheme" was going to collapse - and that time is coming ever closer. Frank Maston, Pittsford, New York

I can agree with everything mentioned in the article. I'm especially fond of reducing the federal workforce and freezing salaries for three years. In fact, why don't they begin scaling back the federal government in every way? Scott Bridges, Independence, Missouri

I say get our troops out of both wars, reduce movement work force. Reduce movement pensions. Eliminate all earmarks period. Stop giving billions of foreign aid to countries that were in war with. James C Brunelle, Portland, Oregon

I believe that very unpopular options must be considered - a combination of cuts in spending and raising taxes. Government employees should take 10-25% salary cuts, just like those which we have experienced in the private sector. And they should lose their pensions, just like we have lost ours in the private sector. Robin Perez, Miami

All of the panel's recommendations should happen. Anything taken off the table from what it recommends would be unfair. For instance, if military spending is not decreased but Medicare is cut, it would favour the military-industrial complex over U.S. citizens. Byron V Caloz, Portland, Oregon

Let's be crystal clear on this - I will stop voting for any party that cuts social security. I have been forced to pay hundreds of thousands of dollars of my money - not the government's money - into this programme and I will consider any reduction in benefits as direct theft by the government. Mark Allen, San Francisco

The ideas of the budget proposal are sound. Therefore, they will never see the light of day. I can say this with great confidence having watched the government for many years. Roy Simerly, Wake Forest, North Carolina

If the wealthy were taxed a fair amount for social security none of the social security benefits would need to be cut. If they recommended changes to the tax laws so corporations would be encouraged to hire Americans instead of outsourcing to other countries people would actually have jobs AND pay taxes AND contribute to the economy. T Gregory, Sedalia, Colorado

What difference does it make? Social security is a pittance, no one can live on it anyway. You cannot work and collect. If we really cut the military and the black hole of the CIA, homeland security and other institutions spying on "terrorists", then we could afford real social security. William Goit, San Clemente