Key elements of the $3 trillion deficit reduction package that President Barack Obama unveiled Monday. The proposals cover a 10-year period:
NEW TAXES: $1.5 trillion in new revenue, which would include about $800 billion realized over 10 years from repealing the Bush-era tax rates for couples making more than $250,000. It also would place limits on deductions for wealthy filers and end certain corporate loopholes and subsidies for oil and gas companies. The president has proposed many of these measures in his budgets before, but Congress has not acted on them.
MEDICARE AND MEDICAID: $248 billion in reductions to Medicare. About 90 percent of the Medicare cuts would be squeezed from service providers such as drug companies, hospitals and nursing homes. Starting in 2017, the plan would significantly increase what many seniors pay for premiums, copayments and deductibles. Medicaid and other federal health care programs would be cut by about $73 billion. Among the proposals would be measures designed to reduce federal Medicaid payments to states.
OTHER MANDATORY SPENDING: $260 billion in cuts to other mandatory spending programs, including $33 billion by ending income support payments to farmers. The plan also would reduce federal workers’ paychecks by 1.2 percent over three years, saving the government about $21 billion over 10 years. The plan estimates savings of nearly $78 billion by reducing waste and abuse in federal programs.
MILITARY COMMITMENTS: $1 trillion saved by ending combat missions in Iraq and Afghanistan. Republicans and some independent budget analysts say this is a gimmick because the troop drawdowns were already under way and amount to an accounting adjustment. But Republicans have used the figure in their budget calculations, too.
INTEREST SAVINGS: $430 billion in savings from lower interest payment on the national debt. The figure combines the president’s $3 trillion in deficit reduction and the $1 trillion that Congress approved and the president signed in August.