In an op-ed in the Washington Post, Sen. Bob Corker (R-TN) outlined a plan for replacing parts of the fiscal cliff with what he estimates to be a $4.5 trillion deficit reduction plan. This is one of the first plans to be put out by a member of Congress since Election Day. Although he has not publicly released the entire bill yet, the op-ed provides a number of specifics about the plan. Encouragingly, Sen. Corker's plan looks for savings from both spending and revenues to address rising debt.
On taxes, Sen. Corker advocates for "pro-growth tax reform," which would raise revenue by capping deductions at $50,000 rather than raising tax rates. According to Tax Policy Center, this policy would raise about $750 billion (or about $500 billion if the charitable deduction were excluded) and would almost exclusively hit high earners (91 percent of the tax increase would come from people making more than $200,000). The plan also calls for switching to the chained CPI for inflation-indexed elements of the tax code, as well as for spending programs.
On the spending side, Corker endorses reforms to federal employee compensation to "bring its compensation in line with private-sector benefits." He supports a version of premium support for Medicare, though it would differ from some recent iterations by leaving the growth of subsidies uncapped. He also would raise the retirement ages for Medicare and Social Security, means-test both programs, and raise Medicare premiums for higher-earners. In addition, he would the end Medicaid tax gimmick, in which states increase both Medicaid spending and provider taxes in order to increase matching payments from the federal government.
We applaud Sen. Corker for putting his ideas on the table as discussions continue to take place. As he points out, lawmakers are not lacking for ideas, just in knowing which ones to use and having the political will to stand by a plan. We appreciate both the way in which he addresses both sides of the federal budget and the manner in which he advocates being aggressive in trying to get something done this year as opposed to next. One would hope other lawmakers follow his example and put their ideas on the table for a bipartisan compromise to move the discussion forward.