Dec. 6 (Bloomberg) -- An advocacy group with ties to the Obama administration proposed a short-term deficit reduction plan that would impose higher taxes on the wealthy, oil companies and other employers.
The plan by the Washington-based Center for American Progress aims to balance the budget, excluding interest payments on the debt, by 2015. It doesn’t address the issue of what to do in subsequent years, when Medicare and Social Security costs are projected to soar.
Michael Ettlinger, who co-wrote the plan, called for modest steps to put the government’s books in order, rather than a “pie in the sky” approach to fix the entire budget.
“Let’s come up with something that’s achievable in the near term,” said Ettlinger, the center’s vice president for economic policy. “People ought to be focusing on something that shows we’re serious, that’s real and meaningful but more readily achievable than solving all of our budget problems forever.”
Last week, President Barack Obama’s 18-member debt commission failed to produce the 14 votes needed to approve a $4 trillion budget-cutting plan that would balance the government’s books by 2035. Ettlinger said his group’s plan was designed to establish “where we think the president, roughly, should be and progressives ought to be” in reducing the deficit.
The plan calls for a 2 percent surtax on taxpayers earning more than $1 million, a $5-per-barrel fee on imported oil, and removal of the cap on income subject to employers’ share of Social Security payroll taxes. It would also eliminate $35 billion in tax breaks for companies, slow the rate at which federal benefits such as Social Security grow with inflation and cut farm subsidies by one-quarter.
The Center for American Progress was founded in 2003 by John Podesta, former White House chief of staff in the Clinton administration.
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