This plan is furthest left on the spectrum of the six plans. The EPI promotes government's role as an investor that can pave the way for job creation and economic growth. Its plan seeks to stabilize national debt "without demanding draconian cuts" to infrastructure or social programs.
Taxes. Overall federal tax revenue would rise to 24.1 percent of GDP by 2035.
• Repeals high-income tax cuts from Bush era. Adds a millionaire surcharge.
• Converts some deductions (mortgage interest, charity) into tax credits.
• Adds excise tax on sweetened beverages.
• Adds carbon tax and raises the gas tax.
Spending. Federal spending would fall to 27.8 percent of GDP in 2035, nearly as high as the current CBO baseline forecast.
• Cuts defense spending to 1.9 percent of GDP.
• Increases some spending (education, energy), while cutting other areas (farm subsidies).
Entitlements. Spending on health and Social Security programs would be restrained to 15.9 percent of GDP in 2035, essentially no change from the CBO outlook.
• Reforms Medicare payment systems.
• Adds a "public option" health-insurance plan for those under retirement age.
• Raises cap on Social Security payroll tax, up to 90 percent of worker earnings.
Deficit or surplus. Deficit of 3.7 percent of GDP in 2035, versus a 5 percent deficit in CBO baseline.
Debt. The plan brings public debt down to about 82 percent of GDP by 2035. That leaves the debt very high, but the trajectory is flattened and a debt crisis might be avoided.
