NEW YORK — Ross Perot's plan for curing America's economic ills says it would turn the estimated $340-billion budget deficit into an $8-billion surplus within five years, relying largely on tax increases and cuts in popular programs.
Its methods, detailed in the latest issue of U.S. News & World Report, would include higher taxes on Social Security benefits, an increase in the top federal income tax bracket from 31% to 33%, taxes on some health benefits provided by employers, higher cigarette taxes and a cap on the deduction for home mortgage interest.
The Perot program also proposes that Medicare spending be slashed by $83 billion over five years, with recipients paying higher premiums, and it calls for a cut in farm programs for farmers who are wealthy.
Perot told the magazine that his plan will find support among many still-loyal volunteers who will press its basic tenets on his former rivals.
Perot's prescriptions differ sharply from those of President Bush and Democratic nominee Bill Clinton. Bush has proposed tax breaks to encourage growth and spending controls to reduce but not erase the deficit. Clinton has called for more public investment to spur growth and has proposed some tax breaks.
Spending cuts proposed by Perot, which would save an estimated $308 billion, include slashing the defense budget by $40 billion more than the $50-billion cut proposed by Bush.
The plan also suggests new spending, including increased federal funds for medical research and critical technologies, new aid to cities totaling $12 billion--including tax breaks for enterprise zones--and funds to establish national education testing.
Among new tax breaks suggested by the Perot plan are a 10% investment tax credit, a capital gains tax cut and a new tax credit for companies to train workers.