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Published December 01, 2010, 07:42 AM

US panel to begin debate on plan to tame debt

WASHINGTON (AP) — The leaders of a special commission chosen by President Barack Obama are unveiling a plan Wednesday to tame the U.S. government's runaway national debt, but it contains politically explosive budget and benefit cuts that may stall the proposal before it even gets to Congress.

WASHINGTON (AP) — The leaders of a special commission chosen by President Barack Obama are unveiling a plan Wednesday to tame the U.S. government's runaway national debt, but it contains politically explosive budget and benefit cuts that may stall the proposal before it even gets to Congress.

The new plan by deficit commission co-chairmen Erskine Bowles and Alan Simpson, proposes raising the retirement age to receive Social Security government pension benefits, cutting the Medicare health care plan for the elderly, curtailing tax breaks and doubling the federal tax on gasoline.

Divisions remain within the 18-member deficit commission itself. The plan appears unlikely to win enough bipartisan support from the panel to be approved for a vote in Congress this year or next. But Bowles has already declared victory, saying he and Simpson have at least succeeded in initiating an "adult conversation" in the country about the pain it will take to cut the deficit.

Obama named the commission in hopes of bringing a deficit-fighting plan up for a vote in Congress this year, but it appears to be falling well short of the 14-vote bipartisan supermajority needed. When Congress comes back in January, Republicans will hold a majority in the House of Representatives, taking over from Obama's Democrats.

The plan faces opposition from many commission members. House Republicans appear uniformly against tax increases, while liberal Democrats like Rep. Jan Schakowsky appear unlikely to be able to accept big cuts in federal programs for seniors.

A new version of the plan, obtained by The Associated Press on Tuesday, makes mostly minor changes to a draft that whipped up enormous controversy when unveiled earlier this month. Some domestic spending cuts are modestly higher than previously proposed, and health care savings from overhauling the medical malpractice system would reap less than proposed earlier this month.

Some proposals remain the same. Among them are a gradual increase in the Social Security retirement age to 68 by 2050 and 69 by 2075, using a less generous cost-of-living adjustment for the programs and increasing the cap on income subject to Social Security taxes.

The plan also retains a 15-cent-a-gallon increase on gasoline, a three-year freeze on federal worker pay and the elimination of 200,000 workers from the federal payroll through attrition.

The proposal obtained by the AP was a draft that was still undergoing changes Tuesday evening.

Bowles was White House chief of staff when former President Bill Clinton negotiated a balanced budget plan in 1997; Simpson is a former Republican senator.

Only Bowles and Simpson are guaranteed to support the plan when the panel votes. None of the 12 House members and senators named by Obama have committed to the proposals, though Bowles and Simpson could pick up support from nonelected deficit hawks like Democrat Alice Rivlin and Honeywell International's chief executive, David Cote, a Republican, who won't have to defend themselves to voters. Republican senators seem more likely to vote for the plan than their rigidly anti-tax increase House counterparts.

"I don't know if we're going to get two votes or five votes or 10 votes or 14 votes," Bowles told reporters. "There are enough reasons to vote 'no' in this plan for anybody to vote 'no.'"

Bowles says it's just as important to have jump-started a national debate on what it'll really take to bring the deficit under control.

"Our goal in this whole process has been really simple," Bowles said. "It's basically been to start an adult conversation here in Washington about the dangers of this debt and the deficits we are running."

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Associated Press writer Andrew Taylor contributed to this report.

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