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2 conservatives, key liberal, back deficit plan

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Dec. 1 (Bloomberg) -- Erskine Bowles, a former chief of staff to President Bill Clinton, and Alan Simpson, a former Republican senator from Wyoming, talk about the outlook for President Barack Obama's debt-reduction commission. Bowles and Simpson talk with Peter Cook on Bloomberg Television's "Street Smart." (Source: Bloomberg)

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By ANDREW TAYLOR
The Associated Press
Friday, December 3, 2010; 1:37 AM

WASHINGTON -- Some of the Senate's staunchest conservatives and one of its most powerful liberals on Thursday swung behind a controversial deficit-slashing proposal from the leaders of President Barack Obama's fiscal commission.

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The plan would raise the Social Security retirement age and scale back popular tax deductions on health insurance and mortgage interest, among its many contentious provisions. It now has public commitments of support from a majority of the commission, but still will fall short of the votes needed to adopt the plan when the panel votes on Friday.

The plan gained the backing of two of the Senate's most conservative Republicans on Thursday and, in a major development, won approval from liberal Sen. Dick Durbin, D-Ill., who's a key ally of the president.

"Borrowing 40 cents out of every dollar we spend for missiles or food stamps is unsustainable," Durbin wrote in an op-ed piece in Friday's Chicago Tribune. "When we engage in the critical decisions about our nation's future budgets, I want progressive voices at the table to argue that we must protect the most vulnerable in our society and demand fairness in budget cuts."

Durbin's announcement means that the plan by commission co-chairs Erskine Bowles, former chief of staff to President Bill Clinton, and former Wyoming GOP Sen. Alan Simpson will win support from a majority of the 18-member panel on Friday.

Announcements earlier Thursday by Sens. Tom Coburn, R-Okla., and Mike Crapo, R-Idaho, in favor of the politically explosive plan to cut the deficit by almost $4 trillion over the coming decade gave the measure momentum from key Senate conservatives.

But two House Republicans on the panel, which was created by Obama in the long-shot hope of coming up with a bipartisan plan to cut deficits expected to total almost $10 trillion over the same 10 years, announced they will oppose the plan, as expected. So did Senate Finance Committee Chairman Max Baucus, D-Mont., a panel member.

That means the plan would fall short of the 14 votes needed to send it to Congress for consideration. Nonetheless, even opponents such as future House Budget Committee Chairman Paul Ryan, R-Wis., said it was a credible first step to build upon next year.

"It's the memo that controls the meeting," said panel member Sen. Judd Gregg, R-N.H., a supporter.

"The time for action is now," Coburn and Crapo said in a statement. "This plan will not just avert a disaster, but help drive the kind of economic recovery we need to create jobs and spur growth."

Durbin raised eyebrows Wednesday when he endorsed raising the Social Security retirement age from 67 to 69 over the coming 65 years, and he resisted heavy pressure from labor unions and others in backing the plan.

"This plan is not perfect, and it is certainly not the plan I would have written," Durbin wrote. "If we don't act now - if we pass this issue on to another Congress, another generation - the tough choices we face now only get tougher."

The plan also picked up support from the Senate's No. 3 Republican, Sen. Lamar Alexander of Tennessee, who said "I'm going to do my best to support recommendations like these."

Bowles and Simpson released the plan Wednesday. To control spending, it calls for politically difficult moves such as increasing the Social Security retirement age and reducing future increases to benefits. It would eliminate or scale back tax breaks - including the child tax credit, mortgage interest deduction and deduction claimed by employers who provide health insurance - in exchange for rate cuts on corporate and income taxes. It would raise the gas tax 15 cents a gallon to fund transportation programs.

The plan opened to catcalls from advocates on the left - over cuts to Social Security and other programs - and the right, who oppose its estimated $1 trillion or so in higher tax revenues over the coming decade.

Baucus opposed it Thursday, citing the impact the plan would have on his state, including a gas tax increase and cuts to Social Security and farm programs. He said the plan "would cut pensions for military members, lower Social Security payments, raise the retirement age and limit Medicare benefits."

The announcements by Durbin, Coburn and Crapo means 10 of the 18 commissioners have publicly endorsed the plan. House Budget Committee Chairman John Spratt Jr., D-S.C., is leaning in favor. His yes vote would bring at least 11 of the 18 commission members behind the plan, awarding Simpson and Bowles a political victory unforeseen when Obama established the deficit panel earlier this year.

Ryan and another plan critic, top House Ways and Means Committee Republican Dave Camp of Michigan, say it wouldn't do enough to curb Medicare and Medicaid costs and would raise taxes too much. Reps. Jan Schakowsky, D-Ill., and Jeb Hensarling, R-Texas, are also against it.



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