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Major cuts could save as much as $4 trillion over the next decade

U.S. President George W. Bush addresses a rally at Lafayette Regional Airport in an effort to sell his tax cut plan to the American people 09 March 2001 in Lafayette, Louisiana.

TEXT OF INTERVIEW

JEREMY HOBSON: Now to the proposal from the leaders of President Obama's deficit reduction commission. The plan calls for cuts in military spending, Medicare spending, a gradual increase in the retirement age for social security benefits and also for ending tax breaks on things like mortgage interest and health care plans. But it would cut deficits by as much as $4 trillion over the next decade.

Let's bring in Diane Swonk Chief economist at Mesero Financial. She joins us live from Chicago. Good morning.

DIANE SWONK: Good morning.

HOBSON: So let's just pretend for a minute that this plan gets enacted, as is. Would it do the trick?

SWONK: It would to start, but it's not going to full cure the problems at ail us but it is a step in the right direction.

HOBSON: OK -- now let's live in the world of reality. Democrats have already come out and said they're unhappy with cuts to entitlements, republicans are saying they don't want to raise taxes on anything. Any chance this plan is going to get through the sausage making machine in Washington?

SWONK: I think the chances are next to nil. We've got an incoming Congress committed to conflict rather than compromise, and at the end of the day, although this plan looks at both sides of the ledger which any economist will tell you is the only way to fundamentally reduce our deficit, there's just too many sacred cows for us to tackle at this stage of the game. And special interest groups behind all those people now already criticizing it, are lining up.

HOBSON: Diane Swonk, chief economist at Mesero Financial, thank you as always for your time.

SWONK: Thank you.

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