Following a day of touting his new plan that would reduce $4.5 trillion from the federal deficit over the next decade, Sen. Bob Corker released more specific details of his 242-page, yet-to-be-introduced proposal.
The senator's office distributed a three-page summary of his Fiscal Reform Act of 2012, a legislative package routinely described by the senator as being "soup to nuts" in its comprehensiveness and scope.
The synopsis shows the former Chattanooga mayor arriving at his $4.5 trillion total by combining more than $3.5 trillion in federal spending reductions with $976 billion in new tax-generated revenue—a nearly 4-1 ratio between the two primary methods of deficit reduction being pushed by Republicans and Democrats in the face of the so-called "fiscal cliff."
The cliff, a $700 billion mix of tax increases and automatic spending cuts set to go into effect at year's end, has President Barack Obama and members of Congress scrambling for a solution to avert a potential outcome that could throw the U.S. economy back into a recession.
In a Washington Post op-ed Monday, Corker wrote that elements of his plan could be enacted as a solution to help dodge portions of the cliff.
Among the more notable items put forward by the senator to achieve that goal is a proposal to limit itemized tax deductions to $50,000—a move that Corker said would generate approximately $749 billion in additional revenues over the next 10 years without raising tax rates, as Obama has repeatedly committed to doing. Corker also proposes permanently extending the Bush era tax cuts and indexing the Alternative Minimum Tax—a move that when combined would cost more than $300 billion, but also prevent the tax measures from expiring at year's end as scheduled.
The highest amounts of spending cuts in Corker's plan are designated for Medicare and would be enacted without placing a spending cap on the costly program. By allowing seniors to opt for privately offered medical care programs as an alternative to the traditional government system, Corker argues that competition would reduce costs for both options.
The senator also proposes gradually raising the eligibility age for Medicare from 65 to 67 by 2027 and opting to fund the physician's sustainable growth rate—better known as the "doc fix" or SGR—until a better solution for preventing provider payments from exceeding economic growth is found. Congress would have until 2015 to find a solution.
Tax policy experts offered mixed reactions to Corker's plan.
Former Rep. Bill Frenzel, who once served as the ranking Republican on the House Budget Committee and now works as a guest scholar for the Brookings Institution, said that Corker's proposal was on the "right track," despite being more austere than some lawmakers may prefer. Frenzel said that although Corker's suggestions for spending reductions heavily outweighed his recommendations for increased tax revenues, the senator's $4.5 trillion figure was "within the ballpark" range of outcomes desired by leaders on both sides of ongoing negotiations.
"Corker and others have come forward and said that we can do tax reform, put a limit on tax deductions and have it matched with corresponding cuts in Medicare and Medicaid," Frenzel said. "It at least indicates that he's willing to ante up to get in the game, and he gets a big plus for that. It's tough, but it comes to that $4.5 trillion total, which is likely what the target will be from all of them. And he antes up about a trillion in taxes."
Andrew Fieldhouse, a federal budget policy analyst for the D.C.-based Economic Policy Institute, said that although Corker's plan was more balanced than other proposals being floated by Republican lawmakers, the senator's recommendations were too extreme, given the current economic climate. Fieldhouse said that austerity measures within the bill could potentially lead to an increase in the national unemployment rate.
"I think going down this path would be a mistake," Fieldhouse said. "There are more unreasonable and less feasible Republican plans floating around there for sure, but this is not about the fiscal cliff, this is about making sure that the economy doesn't go back into a recession, and this certainly seems to fail that litmus test. It could make the problem worse."
Fieldhouse added he was surprised that Corker's plan included a proposed $70 billion spending reduction for Medicaid—substantially less than the $1.7 trillion amount proposed by former Republican presidential candidate Mitt Romney and his running mate, Rep. Paul Ryan.
"That's much closer to what President Obama has in his most recent budget than what Paul Ryan has been talking about for years," he said.
In his op-ed, Corker acknowledged that aspects of his bill "could be improved." It remains to be seen how portions of his proposal will play out among congressional leaders, along with rank-and-file members.
Alek Vey, spokesman for Rep. Chuck Fleischmann, said that the congressman expected portions of the senator's plan to play a role in ongoing negotiations to avert the possible fiscal crisis but did not specify which items he was in agreement with. Vey also did not comment on portions of Corker's plan that the congressman may be opposed to.
"Rep. Fleischmann believes that Sen. Corker's proposal contains credible solutions for resolving the fiscal cliff in a responsible manner," Vey said in an emailed statement. "This week, he will be meeting with his colleagues to discus a fiscal plan for the House of Representatives, where he expects elements of Sen. Corker's plan to be a part of the debate going forward."
Efforts by Nooga.com to reach spokesmen for other Tennessee lawmakers were unsuccessful.
Updated @ 10:11 a.m. on 11/28/12 for clarity.