
                         Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: TUESDAY, December 6, 1994                   TAG: 9412060094
SECTION: NATIONAL/INTERNATIONAL                    PAGE: A-1   EDITION: METRO 
SOURCE: The Washington Post
DATELINE: WASHINGTON                                LENGTH: Medium

TAX-PANEL STAFF URGES SOCIAL SECURITY DELAYS, HIGHER MEDICARE RATES

A staff report of the president's bipartisan commission on entitlements and tax reform has recommended far-ranging, politically explosive changes that would gradually raise the Social Security retirement age and impose higher Medicare insurance premiums and deductibles for most senior citizens.

The commission staff also recommended reducing congressional retirement benefits by as much as 40 percent, cutting Social Security benefits for wealthier people and substantially slashing or eliminating a number of highly popular tax breaks for middle- and upper-income Americans, including the mortgage interest deduction and the deduction for state and local income taxes.

The 32-member commission is charged with devising a plan to help stem the tide of entitlement spending, placing Social Security and Medicare on a sounder financial footing and reducing the deficit. The deficit has been shrinking in recent years but is expected to resume growing.

The commission is scheduled to review the recommendations Friday and vote on a final package next week.

Sens. Bob Kerrey, D-Neb., and John Danforth, R-Mo., the chairman and co-chairman of the commission, have spent months trying to coax members toward consensus on a tough plan that could be submitted to the president and Congress for action next year. However, the commission is dealing with among the most sensitive issues in politics, and many involved in the process are skeptical that the commission can reach an agreement.

Mark Weinberger, the commission's chief of staff, said Monday there was no way to predict the outcome of the deliberations. ``Anything's possible, and Kerrey and Danforth still are hoping to get members to coalesce,'' he said.

``This commission has the best chance of putting the real issues back on the table,'' Weinberger said. ``It will be hard for either party or the White House to take on such tough issues independently.''

Some proposals would speed up the scheduled increase in the retirement age for Social Security recipients from 65 to 67; reduce benefits for upper-income retirees; limit cost-of-living adjustments; and reduce spousal benefits. Another provision would boost from 50 percent to 85 percent the portion of retirement benefits subject to taxation for individuals earning more than $25,000 a year and couples earning more than $32,000.

The staff report suggests reducing the maximum mortgage principal that is eligible for interest deductions from $1 million to $300,000, or even eliminating the deduction altogether.

The report also proposes eliminating deductions for state and local income and property taxes and reducing or eliminating write-offs for charitable contributions.

by CNB