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November 10th, 2010
06:15 PM ET

$4 trillion in deficit cuts proposed

Jeanne Sahadi
CNNMoney.com Senior Writer

NEW YORK (CNNMoney.com) - In a surprise move Wednesday, the co-chairmen of President Obama's fiscal commission released their preliminary proposals to curb growth in U.S. debt.

The report from Erskine Bowles and Alan Simpson recommends spending cuts beginning in 2012, as well as tax reform and other ways to reduce the deficit by $4 trillion over the next decade.

Three quarters of the $4 trillion would be achieved through spending cuts - including defense - and the rest from more tax revenue.

Among the proposed defense cuts: Freeze noncombat military pay at 2011 levels for three years to save $9.2 billion and reduce overseas bases by one-third to save $8.5 billion. It would also direct $28 billion in cuts already proposed by Defense Secretary Robert Gates toward deficit reduction.

Outside of defense, the report recommends eliminating 250,000 contractors, saving $18.4 billion, and freezing federal pay for three years, saving $15.1 billion.

The 18-member commission, which will make formal recommendations to Obama on Dec. 1, has been closely watched by budget experts since its first meeting in April.

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Filed under: 360° Radar
soundoff (3 Responses)
  1. Annie Kate

    Sounds like a good starting point. I'm not really thrilled with the pay freeze for the military; we ask a lot of these young men and women and of anyone in the country they are the ones I would single out to give a raise to.

    November 10, 2010 at 10:18 pm |
  2. morristhewise

    Forget cutting the military budget and Social Security. Lets roll out the printing presses and slice the value of the dollar in half, it might get China angry but it would also slice the national debt in half and increase production in US auto plants. The Ford Escape would be selling at half of its present price in Europe along with most domestically manufactured items. Lets drown the world in low cost products and give them a taste of how we once felt without jobs and self esteem.

    November 10, 2010 at 8:50 pm |
  3. pdny

    If it makes republicans and democrats both unhappy, it can only mean one thing, it's the right thing to do. Getting our debt under control is the ONLY way this country will be great once again. Let's buck up and endure the pain now for the next generation. It's what many generations before us would have done.

    November 10, 2010 at 8:23 pm |