Caveat Emptor: Deficit Reduction Plan Means More Pain for Working Families

A bipartisan plan to cut the deficit appears to be getting a major boost in Washington, but caveat emptor (buyer beware) warns the IAM.

The proposal, negotiated by a group of senators from both parties known as the “Gang of 6,” is said to reduce the deficit by about $3.7 trillion over the next ten years. But not without further pillaging the wallets of working families.

The IAM issued the following warnings:

Buyer Beware: The Gang of 6 wants Social Security reform to “ensure 75-year solvency” if deficit reduction gets 60 votes. Sound fishy? It means higher payroll taxes and/or benefit cuts. And if their “Social Security reforms” don’t get 60 votes, then the entire deficit reduction bill goes down in flames.

Buyer Beware: The Gang of 6 wants to reform “tax expenditures for health, charitable giving, homeownership and retirement…” Sound fishy? That’s really a tax increase for Americans who have high medical bills, contribute to their church, deduct their home mortgage interest or rely on a pension.

Buyer Beware: The Gang of 6 wants “a more effective unemployment trigger.” Sound fishy?  Well, if they raise the triggers, they slash extended unemployment benefits. Fewer jobless qualify for fewer weeks of benefits.

Buyer Beware: The Gang of 6 wants three tax brackets with rates of 8 -12%, 14-22% and 23-29%. Sound fishy? That’s a 17 percent tax CUT for families making over $140,000 per year and a tax INCREASE for those families making between $69,000 and $139,000.

Buyer Beware: The Gang of 6 wants to “permanently repeal the $1.7 trillion Alternative Minimum Tax (AMT).” Sound fishy? AMT applies to families making over $175,000. And this tax CUT cuts the deficit, NOT!

The U.S. is facing an August 2nd deadline to raise the country’s $14.3 trillion debt ceiling or start defaulting on some of its obligations for the first time in history. Efforts to forge an agreement have stalled because of stark disagreements over taxing the rich and making cuts to important safety net programs, like Social Security and Medicare. As an additional note, so far nothing in the plan focuses on creating jobs.