The House Republican Pledge to America

·       Roll back government spending to 2008 pre-stimulus, prebailout levels.  A $100 billion cut in the first year;

·       Establish strict budget caps to limit federal spending from this point forward.  Impose a net hiring freeze on non-security federal employees; and

·       Reviewing every current government program to elimination wasteful and duplicative programs.

House Republican Whip Eric Cantor’s Proposed Agenda

·       Eliminate the Federal Employee Pay Raise. $30 billion

·       Stop Tax payer Subsidized Union Activities.  $1.2 billion

·       Require Collection of Unpaid taxes from Federal Employees. $1 billion

·       Reduce Government Employment to 2008 levels. $35 billion

Deficit Commission Chairs’ Proposal

·       Freeze federal salaries, bonuses and other compensation at non-defense agencies for three years. $15.1 billion

·       Freeze federal salaries, bonuses and other compensation at the Defense Department for three years. $5.3 billion

·       Freeze noncombat military pay at 2011 levels for three years. $5.4 billion

·       Federal workers contribute ½ versus 1/14 of the cost of FERS.  $11 billion/year; $114 billion/10 years

·       Change the formula for calculating annuities from a high three to a high five;

·       Increase Social Security retirement age to 69;

·       Increase premium share of health insurance for federal retirees. $12 billion

·       Cut 10% of the federal workforce, about 200,000 jobs by hiring only two workers for every three that leave.  $13 billion

·       Eliminate 250,000 positions for non-defense contractors.  $14.8 billion

·       Cut defense service contracting positions by 4 percent. $5.4 billion

Schakowsky Alternative Plan to Deficit Commission Chairs’ Proposal

1)  Increased economic stimulus to spur groth in the immediate term-

·       Provide $200 billion in 2011 and 2012 to invest in measures to create jobs and spur economic growth, including passing the Local Jobs for America Act; funding for education and law enforcement; Unemployment Insurance, Federal Medical Assistance Percentages and Supplemental Nutrition Assistance Program extensions; and infrastructure.

·       Adopt the President’s proposals to eliminate overseas tax havens and incentives for outsourcing.

2)  Smart, targeted spending cuts

·       Non-Defense Discretionary - $8.55 billion in savings through increased efficiency and cuts to programs that benefits large corporations that don’t need assistance.

·       Defense Discretionary - $110.7 billion in cuts from the 2015 defense budget, including efficiency savings, reducing our troop levels, cutting weapons systems we don’t need, and scaling back and wartime increases in the size of the military.

3)  Mandatory spending cuts

·       Health Care – at least $17.2 billion in savings by implementing measures to bring down the cost of health care to the federal government and lower health care inflation overall.

·       Other - $7.5 billion in savings by cutting agriculture subsidies in half, and redistributing federal support to offer greater benefits to small family farms reduce subsidies to large corporate agribusiness.

4)  Reductions in tax expenditures

·       Raise $132.2 billion by closing tax subsidies for companies that ship American jobs overseas.

5)  Increases in revenues

·       Raise $144.6 billion in revenue through progressive reforms to the estate tax, treating capital gains and dividends as regular income, and enacting a cap and trade proposal that includes protections for lower-income people.

·       Enact President Obama’s budget proposal to let the Bush tax cuts for the top 2 brackets expire and return to 2009 estate tax levels.

·       Non-tax revenue – raise $7 billion in revenues by addressing places where the private sector is currently under-payings.

6)  Social Security

The Schakowsky alternative does not contain any cuts to Social Security.

·       It ensures long-term solvency to Social Secuirty by eliminating the wage cap on the employer side and raising it to 90% on the employee side, applying FICA to all wage income below the cap, and establishing a modest legacy tax on wealthier Americans.

·       Surplus funding that can be used to improve the extremely modest benefits that are now provided.

Domenici-Rivlin Commission Recommendations

Taxes

·       Payroll Tax  Holiday for 2011

·       Cut Individual income tax rates

·       Cut corporate tax rates

·       Eliminate most deductions and credits, including mortgage interest and charitable contributions

·       Replace deductions for mortgage interest and charitable contributions with 15 percent refundable credits

·       Establish a new 6.5% national sales tax

Health Care Costs

·       Cap exclusion of employer-provided health benefits, then phase out over 10 years.

·       Gradual raise Medicare Part B premiums.

·       Additional Cuts in Medicare.

·       Cuts to Medicaid.

Social Security

·       Raise amount of wages subject to payroll taxes.

·       Change calculation of COLA so that it is lower (for all federal programs).

·       Slightly reduce grown in benefits for top 25 percent of beneficiaries.

·       Increase minimum benefit for long-term, lower-wage earners, and protect the most vulnerable elderly with a modest benefit increase.

·       Tax and benefit formula for increases in life expectancy.

·       Cover newly-hired state and local government workers under Social Security.

·       Raise early retirement age to 64.

Freeze Domestic Discretionary Spending

·       Freeze non-defense discretionary spending for four years and cap at GDP thereafter.

·       Enforce through statutory spending caps, automatic across-the-board cuts, etc.

Federal Retirement

·       High 3 to 5.

·       COLA redefinition so that it is reduced.