Index the retirement age to longevity -- i.e., increase the retirement age to qualify for Social Security -- to age 69 by 2075. Index Social Security yearly increases to inflation rather than wages, which will generally mean lower cost of living increases and less money per average recipient. "Increase progressivity of benefit formula" -- i.e., means test part of Social Security benefits by 2050. Increase the Social Security contribution ceiling: while people only pay Social Security taxes on the first $106,800 of their wages today, that's only about 86% of the total potentially taxable wages. The co-chairs suggest raising the ceiling to capture 90% of wages. The co-chairs suggest capping both government expenditures and revenue at 21% of GDP eventually. Freeze federal worker wage increases through 2014; eliminate 200,000 federal jobs by 2020; and eliminate 250,000 federal non-defense contractor jobs by 2015. Establish co-pays in the VA medical system and change the co-pays and deductibles for military retirees that remain in that system. Eliminate NASA funding for commercial space flight. Require the Smithsonian museums to start charging entrance fees and raise fees at the national parks. Eliminate funding to the Corporation for Public Broadcasting -- which many conservatives suggested in the wake of the firing of former NPR contributor Juan Williams. Reduce farm subsidies by $3 billion per year.
I mean, we're gonna have to, you know, tackle some big issues like entitlements that, you know, when you listen to the Tea Party or you listen to Republican candidates they promise we're not gonna touch.
Both Summers and Sperling said there would not be consensus in today's session about how to fix the program. They also said the public was more receptive to the government making hard decisions necessary to keep SS from running out of money in the long run, because Americans are anxious about their private retirement savings and the value of their houses.
Sperling said: "I think there may be a lot more openness than we thought in the past for people to have an honest discussion about the shared sacrifice necessary to have Social Security solvency. That this would be a sure thing they could count on, and they could count on for the next 50 to 75 years."
At the end, Sperling also tried to cut through disagreement over whether the program was in a state of crisis. "I really hate the whole argument about, is this a crisis or is this not a crisis? Why do we not want to preempt a crisis. Why do we not want to do something early? It is a shame on our political system that there has never been entitlement reform without a gun to our head. . .Wouldn't it be a tremendous confidence-building thing to act early and smart?"
The proposed simplification of the tax code would repeal or modify a number of popular tax breaks — including the deductibility of mortgage interest payments — so that income tax rates could be reduced across the board. Under the plan, individual income tax rates would decline to as low as 8 percent on the lowest income bracket (now 10 percent) and to 23 percent on the highest bracket (now 35 percent). The corporate tax rate, now 35 percent, would also be reduced, to as low as 26 percent.