A bipartisan group of senators known as the “Gang of Six” Tuesday unveiled their 10-year $3.7 trillion deficit-reduction plan, featuring a mixture of tax hikes and spending reductions, much to the approval of President Obama.
An executive summary of the plan says it would stabilize the nation’s debt by 2014 and reduce publicly held debt to 70 percent of gross domestic product by 2021. Two separate bills would need to be passed: one implementing $500 billion in cuts and another with larger reforms.
Doctors would avoid substantial cuts in Medicare payments for the next decade as the plan covers the “doc fix” for 10 years. Social Security would also be reformed to ensure its solvency for 75 years, according to the summary. The Community Living Assistance Services and Support (CLASS) Act, the voluntary long-term care insurance program instituted by healthcare reform, would be repealed.
Congress has until August 2 to raise the current $14.3 trillion debt ceiling before the country begins defaulting on its loans, which could result in rising interest rates and the declining value of the dollar.