Pelosi Deems Draft Fiscal Plan ‘Unacceptable’

Speaker Nancy Pelosi on Wednesday blasted a bipartisan draft proposal by the co-chairmen of President Barack Obama’s fiscal commission that would slice $4 trillion from the deficit over the next decade.

“This proposal is simply unacceptable,” the California Democrat said in a statement. “Any final proposal from the commission should do what is right for our children and grandchildren’s economic security as well as for our nation’s fiscal security, and it must do what is right for our seniors, who are counting on the bedrock promises of Social Security and Medicare. And it must strengthen America’s middle class families — under siege for the last decade, and unable to withstand further encroachment on their economic security.”

Pelosi’s opposition isn’t surprising, but it shows how difficult it could be to get a bipartisan budget deal through Congress.

Pelosi, who is trying to bolster her bid to become Minority Leader, has previously opposed several ideas that appear in the draft proposal, including raising the retirement age. She received endorsements Wednesday for her leadership bid from seniors groups opposed to budget cuts.

The left and the right have both targeted the proposal, released Wednesday by Erskine Bowles, who served as chief of staff to President Bill Clinton, and Alan Simpson, a Republican who formerly represented Wyoming in the Senate, although liberals have been more vehement in their opposition. The plan combines strict new cost controls with sweeping tax changes to slash the deficit. It’s intended to be the kind of bold compromise that Republicans and Democrats might accept if they were willing to cut a deal.

While several centrist lawmakers and outside groups that focus on the deficit praised the report, an array of opponents are trying to kill it.

The AFL-CIO ripped the plan’s provisions to cut Medicare and Social Security spending, as well as a proposal to slowly increase the retirement age to 69 by 2075. Americans for Tax Reform slammed proposals to eliminate most federal tax deductions and a proposal to increase the gas tax by 15 cents a gallon to pay for transportation projects.

While the plan would also slash income tax rates, the loss of the tax deductions would outweigh it, resulting in a net increase in tax revenue. That could be a deal breaker for ascendant Republicans who just took over the House and who have opposed any tax increases as part of a budget deal. However, House and Senate Republicans on the commission and GOP leaders generally withheld criticism or praised the document as a good first step toward a deal.

The proposals to raise the retirement age and other austerity measures, like cutting the federal workforce by 10 percent and freezing salaries, are certain to be opposed by the bulk of House Democrats, most of whom have already signed a letter opposing any cuts to Social Security.