US deficit panel calls for deep cuts and tax rises
Dec 2nd, 2010 by Jessica Li
“A presidential panel set up to help trim the US budget deficit has called for steep spending cuts and tax rises.”
Panel co-chairmen Alan Simpson and Erskine Bowles devised the recommendations
“The proposal would cut defense, social security and other spending, slashing a total of $4.1tn from the budget deficit by 2020.” This is a huge cut on the basis of decreasing harshly on citizen’s living standard and basically, their physical security rights has dropped dramatically.
“President Barack Obama proposed a two-year pay freeze for federal government workers as part of efforts to reduce the budget deficit.” Although this may be a part of government workers’ responsibility in order to save citizens’ daily expenditure. However, this is in a risk of being disincentive to the workers of reducing their effort in initiating ideas and implementations to solve national economic issues. Their recommendations include “reduce social security retirement payments to wealthier Americans, while gradually increasing the retirement age and the amount of wage income subject to the social security tax”, “limit annual cost increases for Medicare and Medicaid, the federal healthcare programmes, to 1% of economic growth rate”, “eliminate corporate subsidies in the US tax system” and others to reduce expenditure. These reduce their citizens’ living standard straight forward and decreasing subsidies can cause discouraged employees as well.