On April 13 Wisconsin Congressman Paul Ryan proposed a budget proposing $6 trillion in budget cuts and making significant policy changes to Medicare and Medicaid.
President Obama than responded with a budget of his own which had the following key provisions:
1. Deficit Reduction – $4 trillion over a period of 12 years in order to strengthen the economy and encourage employment.
2. Debt Trigger – If the national debt is not on a declining path, there would be automatic across-the-board spending reductions starting in 2014.
3. Spending Cuts and Tax Increases – There would be a balance between the reductions in spending and increases in taxes.
4. Shared Sacrifice – There would be budget cuts, but also increased taxes for upper-income Americans.
5. Bipartisan Commission – Vice President Biden would chair a commission with two appointed members from each committee. The commission would negotiate deficit reduction measures.
6. Medicare – The expenditure would eventually be limited to the growth in the economy per person plus 0.5% per year. There would be no block grants to states.
7. Income Tax Rates – The top tax brackets would increase to 36% and 39.6% for upper income taxpayers. Tax savings on itemized deductions for charitable gifts and mortgage interest would be limited to the savings of a taxpayer in the 28% bracket.
Source: Gift Legacy eNewsletter
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