November 16, 2010 / 11:46 PM / 9 years ago

U.S. deficit panel member unveils alternative plan

WASHINGTON, Nov 16 (Reuters) - A Democratic member of a presidential commission on cutting the U.S. budget deficit said on Tuesday she cannot support proposals unveiled last week by the commission’s leaders and unveiled her own alternatives.

“I am releasing my own plan today because I believe that there is a better way to achieve our goal — one that protects the poor and the middle-class,” Representative Jan Schakowsky said in a statement, calling the poor and the middle class blameless in the nation’s mounting deficit problem.

“Ten years ago the federal budget was generating a surplus ... That surplus was turned into a deficit due to massive tax cuts — mainly to wealthy Americans; two wars paid for by borrowed money; and a major recession caused by the recklessness of the big Wall Street banks,” she said.

Schakowsky’s alternative proposals underscored the challenge faced by the co-chairmen of the commission in achieving bipartisan consensus on a deficit reduction plan by a Dec. 1 deadline imposed by President Barack Obama.

Schakowsky, of Illinois, called for $200 billion in economic stimulus spending over two years to revive the economy and create jobs. She recommended raising $132.2 billion by “closing tax subsidies for companies that ship American jobs overseas;” $110.7 billion in cuts from the 2015 defense budget; and raising $144.6 billion by changing the estate tax and treating capital gains and dividends as regular income.

Schakowsky’s plan does not contain any cuts to the Social Security retirement pension plan. “Social Security has nothing to do with the deficit,” she said.

Commission co-chairmen Erskine Bowles and Alan Simpson last week proposed raising taxes and the Social Security retirement age, among other bold ideas, to slash the budget deficit.

Their ideas are unlikely to win the support of their own commission, however, according to analysts.

Seeking to show that his administration was serious about deficit reduction, Obama earlier this year instructed the commission to find ways to balance the federal budget, excluding interest payments on the national debt, by 2015.

Fourteen of the commission’s 18 members must vote to approve a final report for it to be voted on by Congress. Analysts expect it will be hard to reach that level of agreement and predict a less-conclusive report may result.

The U.S. budget deficit is presently $1.3 trillion and the national debt is more than $13.6 trillion. (Reporting by Kevin Drawbaugh and Kim Dixon; Editing by Dan Grebler)

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