Coburn releases details of $9 trillion deficit reduction proposal 

Sen. Tom Coburn, R-Okla., today released a sweeping plan to reduce deficits by $9 trillion over the next ten years by grabbing at multiple third rails in Washington -- slowing the growth of entitlements, slashing the defense budget, and reducing tax deductions for employer-based health care coverage and home mortgages.

The plan, which is comprised of 614 pages worth of proposals, would reduce projected spending on Medicare and Medicaid by $2.64 trillion. In contrast to Rep. Paul Ryan’s plan passed by the House in April, the Coburn proposal would also make a number of changes to Social Security to make the system solvent over the 75-year time period.

You can details of read the plan here.

Coburn proposes cuts to every branch of government and every cabinet department.

While conservatives will embrace many of these moves, several aspects of the plan are also likely to cause consternation on the right. It would slash the projected defense budget by just over $1 trillion and hike tax revenues by nearly $1 trillion, mostly by eliminating what he terms as “tax expenditures.”

This morning, Grover Norquist’s Americans for Tax Reform, which has been in an increasingly acrimonious battle with Coburn over taxes, fired a preemptive strike against the Coburn proposal, sending out an email titled, “Coburn’s Top Five ‘Let’s Hike Taxes’ Quotations.”

As for his specific ideas, like the Ryan plan, Coburn calls for repealing President Obama’s national health care law that expands Medicaid enrollment, and also proposes transferring control of Medicaid over to the states. But the Coburn plan does not transition Medicare into a system in which seniors could choose among subsidized private plans, a central feature of the Ryan budget.

Instead, the Coburn proposal saves money by increasing the amount of money seniors would have to contribute toward paying their own Medicare premiums as well as for utilizing health care services. In addition to saving the government money directly, this move is also meant to discourage over-utilization of health care services. In addition, Coburn would slowly increase the retirement age to 69 by 2080 and make those earning over $150,000 pay higher premiums.

Coburn would also employ means-testing to reform Social Security, by reducing the growth of benefits for higher-income earners. Other proposals involve increasing the retirement age and adjusting the method by which cost of living adjustments and spousal benefits are calculated. While the reforms would only save $17 billion over the next 10 years, they would make the program solvent over the long-term.

On defense, Coburn proposed ways save money by reforming the F-35 Joint Strike Fighter program, reducing the nuclear weapons stockpile, limiting the growth of the defense workforce, returning to pre-2007 levels of active duty military personnel, and reforming the department’s health care programs, among other changes.

And on taxes, Coburn proposes eliminating a series of credits and deductions for economic development that benefit special interests, from energy companies to Hollywood movie studios. He also suggests eliminating the mortgage interest deduction on second homes and lowering the cap on someone’s primary home to $500,000, as well as capping the benefit from deducting employer-based health care. These and other changes to the tax code he identifies would generate $992 billion in additional revenue, according to the report.

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