In it, but not of it. TPM DC
- A debt failsafe that will be triggered if the debt-to-GDP ratio hasn't stabilized, and begun to decline by mid-decade. This will include automatic spending cuts, and reductions in tax subsidies, but no tax increases. Social Security, Medicare, and low-income programs will be exempted. It will not tie the government's hands in the event that an economic downturn requires fiscal stimulus.
- Cuts to discretionary spending, compatible with those in the Bowles-Simpson recommendations.
- Defense spending cuts, contingent on a thorough review conducted by Secretary Robert Gates, the Joint Chiefs of Staff, and Obama himself, and savings generated by winding down operations in Iraq and Afghanistan.
- Strengthening the Independent Payment Advisory Board, created by the health care law to recommend and implement cost savings reforms to hold down the cost-per-Medicare-patient.
- Simplifying the formula for providing federal matching funds to states for Medicaid, which would automatically increase in the event of a recession
- This is a big one -- Obama will propose using Medicare's purchasing power to reduce prescription drug costs for seniors
- Reductions in agricultural subsidies
- Comprehensive tax reform, which reduces loopholes, simplifies the system, allows the Bush tax cuts for high-income earners to expire, and reduces the corporate tax rate.
This is a decidedly centrist approach -- and one that's hard to reconcile with the House Republican budget.