20101117 former senate leaders announce creation of debt re 18
Task Force Co-Chairs, Alice Rivlin (R) and former Sen. Pete Domenici (R-MN) (L), speak to the media during a news conference to launch the Bipartisan Policy Center's Debt Reduction Task Force January 25, 2010 in Washington, DC. The bipartisan task force was created to address the growing budget crisis in the U.S. - 


JEREMY HOBSON: You've heard about the deficit cutting plan from the leaders of the President's debt commission. Well this morning there's another proposal. It's from the independent Bipartisan Policy Commission. Led by Pete Dominici -- a former Republican Senator from New Mexico -- and Alice Rivlin, who was White House Budget Director under President Clinton.

Marketplace's Washington Bureau Chief John Dimsdale has a sneak preview.

John Dimsdale: Today's plan balances the budget by 2014. It lowers and simplifies income taxes and suspends the 6 percent payroll tax for a year. Co-chair Alice Rivlin says that puts a lot of money in a lot of pockets.

Alice Rivlin: That's good from a spending point of view. We also are proposing that the employer part be suspended for a year. That gives employers an incentive to hire people, or hire them sooner.

A new 6.5 percent national sales tax would replace the lost revenue. Also, Medicare premiums would go up and Social Security benefits go down. Domestic government spending would be frozen for four years, and defense for five, says co-chair Pete Domenici.

Pete Domenici: We think the economy and its endangerment is more of a problem than military preparedness. Debt is a bigger security problem than anything else.

Domenici and Rivlin call their plan realistic, not surrealistic.

In Washington, I'm John Dimsdale for Marketplace.