A bipartisan group of U.S. senators, including one Virginia lawmaker, has presented its proposals for spending cuts and tax increases that would reduce the federal budget deficit by $3.7 trillion over the next decade.
Sens. Saxby Chambliss (R-Ga.), Tom Coburn (R-Okla.), Kent Conrad (D-N.D.), Mike Crapo (R-Idaho), Dick Durbin (D-Ill.) and Mark Warner (D-Va.), known as the “Gang of Six,” have been meeting for months to work on their deficit reduction plan. Coburn had previously left the group over a disagreement on tax increases, but was reportedly back with the group when it presented its proposals Tuesday morning.
The senators’ plan attracted support from leading Republicans including Sens. Lamar Alexander (R-Tenn.), Kay Bailey Hutchinson (R-Texas) and Mike Johanns (R-Neb.). But the legislation will not be ready before the Aug. 2 deadline to raise the debt limit and avoid government default.
According to the Associated Press, the plan reportedly includes three income tax rates — a bottom rate of 8–12 percent, a middle rate of 14–22 percent and a top rate of 23–29 percent. The current system has a bottom rate of 10 percent and five additional rates topping out at 35 percent. The plan would also reduce tax breaks on mortgage deductions, 401(k) plans and IRAs, charitable deductions and child tax credits, among other areas, and would close some corporate tax loopholes. It would lower tax rates for individuals and businesses and eliminate the alternative minimum tax.
The plan reportedly would cut $500 billion from the deficit immediately.
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