[Edit] We've tried to summarize the recommendations of the timely and important document. You can also download the full plan here. The sections on Health Care and reforming Medicare are especially pertinent for our State. We've extracted the recommendations to make the document and the work of the Commission more accessible.

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I. Discretionary Spending Cuts

RECOMMENDATION 1.1: CAP DISCRETIONARY SPENDING THROUGH 2020. Hold spending in 2012 equal to or lower than spending in 2011, and return spending to pre-crisis 2008 levels in real terms in 2013. Limit future spending growth to half the projected inflation rate through 2020.

RECOMMENDATION 1.2: CUT BOTH SECURITY AND NON-SECURITY SPENDING. Establish firewall between the two categories through 2015, and require equal percentage cuts from both sides.

RECOMMENDATION 1.3: ENFORCE CAPS THROUGH TWO MECHANISMS -- POINT OF ORDER AND ABATEMENT. Require a separate non-amendable vote in House and 60-vote point of order in Senate to spend above the caps. If caps are exceeded, impose across-the-board abatement by the amount appropriations exceed the caps.

RECOMMENDATION 1.4: REQUIRE THE PRESIDENT TO PROPOSE ANNUAL LIMITS FOR WAR SPENDING. Create a separate category for Overseas Contingency Operations (OCO).

RECOMMENDATION 1.5: ESTABLISH A DISASTER FUND TO BUDGET HONESTLY FOR CATASTROPHES.

Restoring fiscal discipline requires honest budgeting. Any given disaster may itself be unpredictable, but the need to pay for some level of disaster relief is not. Yet federal budgets rarely set aside adequate resources in anticipation of such disasters, and instead rely on emergency supplemental funding requests. The Commission plan explicitly sets aside funds for disaster relief and establishes stricter parameters for the use of these funds.

RECOMMENDATION 1.6: STOP THE ABUSE OF EMERGENCY SPENDING.

In limited situations, some emergency costs may be necessary. However, such spending must be subject to far greater accountability and transparency that it is today. Too often, Congress uses the emergency designation as a loophole to get around fiscal restraints. The Commission proposes several steps to make sure the emergency designation is used only for true emergencies.

RECOMMENDATION 1.7: FULLY FUND THE TRANSPORTATION TRUST FUND INSTEAD OF RELYING ON DEFICIT SPENDING. Dedicate a 15-cent per gallon increase in the gas tax to transportation funding, and limit spending if necessary to match the revenues the trust fund collects each year.

RECOMMENDATION 1.8: UNLEASH AGENCIES TO BEGIN IDENTIFYING SAVINGS.
Every federal agency will need to do its part to live within tough spending caps.

RECOMMENDATION 1.9: ESTABLISH CUT-AND-INVEST COMMITTEE TO CUT LOW-PRIORITY SPENDING, INCREASE HIGH-PRIORITY INVESTMENT, AND CONSOLIDATE DUPLICATIVE FEDERAL PROGRAMS.

RECOMMENDATION 1.10: ADOPT IMMEDIATE REFORMS TO REDUCE SPENDING AND MAKE THE FEDERAL GOVERNMENT MORE EFFICIENT.

1.10.1 Reduce Congressional and White House budgets by 15 percent.

1.10.2 Impose a three-year freeze on Member pay.

1.10.3 Impose a three-year pay freeze on federal workers and Defense Department civilians.

1.10.4 Reduce the size of the federal workforce through attrition.

1.10.5 Reduce federal travel, printing, and vehicle budgets.

1.10.6 Sell excess federal real property.

1.10.7 Eliminate all congressional earmarks.

RECOMMENDATION 1.11: FIND ADDITIONAL CUTS IN SECURITY AND NON-SECURITY SPENDING.

II. Tax Reform

Lower rates, broaden the base, and cut spending in the tax code. The current tax code is riddled with $1.1 trillion of tax expenditures: backdoor spending hidden in the tax code. Tax reform must reduce the size and number of these tax expenditures and lower marginal tax rates for individuals and corporations – thereby simplifying the code, improving fairness, reducing the tax gap, and spurring economic growth. Simplifying the code will dramatically reduce the cost and burden of tax preparation and compliance for individuals and corporations.

Reduce the deficit. To escape our nation’s crushing debt and deficit problem, we must have shared sacrifice – and that means a portion of the savings from cutting tax expenditures must be dedicated to deficit reduction. At the same time, revenue cannot constantly increase as a share of the economy. Deficit reduction from tax reform will be companied by deficit reduction from spending cuts—which will come first. Under our plan, revenue reaches 21 percent of GDP by 2022 and is then capped at that level.

Maintain or increase progressivity of the tax code. Though reducing the deficit will require shared sacrifice, those of us who are best off will need to contribute the most. Tax reform must continue to protect those who are most vulnerable, and eliminate tax loopholes favoring those who need help least.

Make America the best place to start a business and create jobs. The current tax code saps the competitiveness of U.S. companies. Tax reform should make the United States the best place for starting and building businesses. Additionally, the tax code should help U.S.-based multinationals compete abroad in active foreign operations and in acquiring foreign businesses.

RECOMMENDATION 2.1: ENACT FUNDAMENTAL TAX REFORM BY 2012 TO LOWER RATES, REDUCE DEFICITS, AND SIMPLIFY THE CODE. Eliminate all income tax expenditures, dedicate a portion of the additional revenue to deficit reduction, and use the remaining revenue to lower rates and add back necessary expenditures and credits.

2.1.1 Cut rates across the board, and reduce the top rate to between 23 and 29 percent.

2.1.2 Dedicate $80 billion to deficit reduction in 2015 and $180 billion in 2020.

2.1.3 Simplify key provisions to promote work, homes, health, charity, and savings while increasing or maintaining progressivity.

RECOMMENDATION 2.2: ENACT CORPORATE REFORM TO LOWER RATES, CLOSE LOOPHOLES, AND MOVE TO A TERRITORIAL SYSTEM.

2.2.1 Establish single corporate tax rate between 23 percent and 29 percent.

2.2.2 Eliminate all tax expenditures for businesses.

2.2.3 Move to a competitive territorial tax system.

2.2.3 Move to a competitive territorial tax system.

III. Health Care Savings

RECOMMENDATION 3.1: REFORM THE MEDICARE SUSTAINABLE GROWTH RATE. Reform the Medicare Sustainable Growth Rate for physician payment and require the fix to be offset. (Saves $3 billion in 2015, $26 billion through 2020, relative to a freeze)

RECOMMENDATION 3.2: REFORM OR REPEAL THE CLASS ACT.
(Costs $11 billion in 2015, $76 billion through 2020)

RECOMMENDATION 3.3: PAY FOR THE MEDICARE “DOC FIX” AND CLASS ACT REFORM. Enact specific health savings to offset the costs of the Sustainable Growth Rate (SGR) fix and the lost receipts from repealing or reforming the CLASS Act.

Medicare Savings

3.3.1 Increase government authority and funding to reduce Medicare fraud.
(Saves $1 billion in 2015, $9 billion through 2020)

3.3.2 Reform Medicare cost-sharing rules.
(Saves $10 billion in 2015, $110 billion through 2020)

3.3.3 Restrict first-dollar coverage in Medicare supplemental insurance.
(Medigap savings included in previous option. Additional savings total $4 billion in 2015, $38 billion through 2020.)

3.3.4 Extend Medicaid drug rebate to dual eligibles in Part D.
(Saves $7 billion in 2015, $49 billion through 2020)

3.3.5 Reduce excess payments to hospitals for medical education.
(Saves $6 billion in 2015, $60 billion through 2020)

3.3.6 Cut Medicare payments for bad debts.
(Saves $3 billion in 2015, $23 billion through 2020)

3.3.7 Accelerate home health savings in ACA.
(Saves $2 billion in 2015, $9 billion through 2020)

Medicaid Savings

3.3.8 Eliminate state gaming of Medicaid tax gimmick.
(Saves $5 billion in 2015, $44 billion through 2020)
Many states finance a portion of their Medicaid

3.3.9 Place dual eligibles in Medicaid managed care.
(Saves $1 billion in 2015, $12 billion through 2020)

3.3.10 Reduce funding for Medicaid administrative costs.
(Saves $260 million in 2015, $2 billion through 2020)

Other Savings
3.3.11 Allow expedited application for Medicaid waivers in well-qualified states.

3.3.12 Medical malpractice reform.
(Saves $2 billion in 2015, $17 billion through 2020)

3.3.13 Pilot premium support through FEHB Program.
(Saves $2 billion in 2015, $18 billion through 2020)

RECOMMENDATION 3.4: AGGRESSIVELY IMPLEMENT AND EXPAND PAYMENT REFORM PILOTS. Direct CMS to design and begin implementation of Medicare payment reform pilots, demonstrations, and programs as rapidly as possible and allow successful programs to be expanded without further congressional action.

RECOMMENDATION 3.5: ELIMINATE PROVIDER CARVE-OUTS FROM IPAB. Give the Independent Payment Advisory Board (IPAB) authority to make recommendations regarding hospitals and other exempted providers.

RECOMMENDATION 3.6: ESTABLISH A LONG-TERM GLOBAL BUDGET FOR TOTAL HEALTH CARE SPENDING. Establish a global budget for total federal health care costs and limit the growth to GDP plus 1 percent.

IV. Other Mandatory Policies

Slightly less than one-fifth of the federal budget is dedicated to other mandatory programs. These include civilian and military retirement, income support programs, veterans’ benefits, agricultural subsidies, student loans, and others.

These mandatory programs are not projected to be the main drivers of rising deficits over the next ten years, but they nevertheless should be part of a comprehensive plan to correct our fiscal path. This is especially true because mandatory spending is not subject to the scrutiny of the annual appropriations process – so poorly directed spending can continue for years with minimal oversight. The Commission’s goals in reforming these policies are:

Protect the disadvantaged. About 20 percent of mandatory spending is devoted to income support programs for the most disadvantaged. These include programs such as unemployment compensation, food stamps, and Supplemental Security Income (SSI). These programs provide vital means of support for the disadvantaged, and this report does not recommend any fundamental policy changes to these programs.

End wasteful spending. The first place to look for savings must be wasteful spending, including subsidies that are poorly targeted or create perverse incentives, and improper payments that can be eliminated through program integrity efforts.

Look to the private sector. Some mandatory programs, like federal civilian and military retirement systems, are similar to programs in the private sector. When appropriate, we should apply innovations and cost-saving techniques from the private sector.

RECOMMENDATION 4.1: REVIEW AND REFORM FEDERAL WORKFORCE RETIREMENT PROGRAMS. Create a federal workforce entitlement task force to re-evaluate civil service and military health and retirement programs and recommend savings of $70 billion over ten years.

Use the highest five years of earnings to calculate civil service pension benefits for new retirees (CSRS and FERS), rather than the highest three years prescribed under current law, to bring the benefit calculation in line with the private sector standard.
(Saves $500 million in 2015, $5 billion through 2020)

Defer Cost of Living Adjustment (COLA) for retirees in the current system until age 62, including for civilian and military retirees who retire well before a conventional retirement age. In place of annual increases, provide a one-time catch-up adjustment at age 62 to 45
increase the benefit to the amount that would have been payable had full COLAs been in effect.
(Saves $5 billion in 2015, $17 billion through 2020)

Adjust the ratio of employer/employee contributions to federal employee pension plans to equalize contributions.
(Saves $4 billion in 2015, $51 billion through 2020)

RECOMMENDATION 4.2: REDUCE AGRICULTURE PROGRAM SPENDING THROUGH 2020. Reduce net spending on mandatory agriculture programs by $10 billion from 2012 through 2020 with additional savings to fund an extension of the agriculture disaster fund, and allow the Agriculture Committees to reallocate funds as necessary according to their priorities in the upcoming Farm Bill.

(Saves $1 billion in 2015, $10 billion through 2020)

RECOMMENDATION 4.3: ELIMINATE IN-SCHOOL SUBSIDIES IN FEDERAL STUDENT LOAN PROGRAMS. Eliminate income-based subsidies for federal student loan borrowers and better target hardship relief for loan repayment.
(Saves $5 billion in 2015, $43 billion through 2020)

RECOMMENDATION 4.4: GIVE PENSION BENEFIT GUARANTEE BOARD AUTHORITY TO INCREASE PREMIUMS.

The Commission recommends allowing the PBGC’s board to increase both flat- and variable-rate premiums (which are recorded in the budget as offsetting collections). Giving the PBGC board the authority to raise the premium rate to restore solvency and cover this shortfall will achieve mandatory budget savings in the near term, and more importantly, will sharply reduce the likelihood of a government rescue in the future.
(Saves $2 billion in 2015, $16 billion through 2020)

In addition to the options above, the Commission makes recommendations for a number of small programs. Savings are totaled; option descriptions follow.
(Saves $1 billion in 2015, $8 billion through 2020)

The Commission recommends allowing the PBGC’s board to increase both flat- and variable-rate premiums (which are recorded in the budget as offsetting collections). Giving the PBGC board the authority to raise the premium rate to restore solvency and cover this shortfall will achieve mandatory budget savings in the near term, and more importantly, will sharply reduce the likelihood of a government rescue in the future.
(Saves $2 billion in 2015, $16 billion through 2020)

In addition to the options above, the Commission makes recommendations for a number of small programs. Savings are totaled; option descriptions follow.
(Saves $1 billion in 2015, $8 billion through 2020)

RECOMMENDATION 4.5: ELIMINATE PAYMENTS TO STATES FOR ABANDONED MINES.
The Abandoned Mine Land program at the Department of the Interior operates a fund for the reclamation of abandoned coal mines across the United States. The program is financed by a fee paid by the coal industry. In 2006, Congress authorized payments from the Abandoned Mine Land fund to states and tribes certified as having completed the reclamation of their abandoned coal mines – though payments can be used for any purpose. The Commission recommends eliminating these payments because they no longer serve their stated purpose -- contributing to reclaiming abandoned coal mines. Instead, they are paid to states and tribes whose mines have already been reclaimed.

RECOMMENDATION 4.6: EXTEND FCC SPECTRUM AUCTION AUTHORITY.
Since 1993, the Federal Communication Commission (FCC) has raised about $55 billion through its authority to assign radio spectrum licenses by competitive bidding. The Commission recommends that this authority, set to expire in 2012, should be made permanent. The Commission also encourages Congress to consider granting the FCC authority to conduct incentive auctions to free up spectrum for commercial wireless providers, which the FCC estimates could generate significant mandatory receipts.

RECOMMENDATION 4.7: INDEX MANDATORY USER FEES TO INFLATION.
The federal government charges user fees or licensing fees for a variety of products and services it provides to individuals and businesses. Where applicable, these fees should be indexed for inflation and should match market rates so that the burden of maintaining these programs is not shifted to taxpayers.

RECOMMENDATION 4.8: RESTRUCTURE THE POWER MARKETING ADMINISTRATIONS TO CHARGE MARKET RATES.

Power marketing administrations, part of the Department of Energy, generate and sell electricity from federally owned hydroelectric facilities and power plants. By statute, they are required to sell the electricity at cost. Raising prices to market rates would raise around $200 million in additional revenue each year.

RECOMMENDATION 4.9: REQUIRE TENNESSEE VALLEY AUTHORITY TO IMPOSE TRANSMISSION SURCHARGE.
The Tennessee Valley Authority (TVA) is a federally owned corporation that provides electricity to around 9 million people in the Southeast. TVA sells electricity below market rates, and its revenues are not sufficient to cover both its current operations and its debts. Adding a surcharge for all electricity transmitted by TVA would require TVA’s customers – rather than American taxpayers at large – to cover TVA’s costs.

RECOMMENDATION 4.10: GIVE POST OFFICE GREATER MANAGEMENT AUTONOMY

V. Social Security

RECOMMENDATION 5.1: MAKE RETIREMENT BENEFIT FORMULA MORE PROGRESSIVE. Modify the current three-bracket formula to a more progressive four-bracket formula, with changes phased in slowly. Change the current bend point factors of 90%|32%|15% to 90%|30%|10%|5% by 2050, with the new bend point added at median lifetime income.

RECOMMENDATION 5.2: REDUCE POVERTY BY PROVIDING AN ENHANCED MINIMUM BENEFIT FOR LOW-WAGE WORKERS. Create a new special minimum benefit that provides full career workers with a benefit no less than 125 percent of the poverty line in 2017 and indexed to wages thereafter.

RECOMMENDATION 5.3: ENHANCE BENEFITS FOR THE VERY OLD AND THE LONG-TIME DISABLED. Add a new “20-year benefit bump up” to protect those Social Security recipients who have potentially outlived their personal retirement resources.

RECOMMENDATION 5.4: GRADUALLY INCREASE EARLY AND FULL RETIREMENT AGES, BASED ON INCREASES IN LIFE EXPECTANCY. After the Normal Retirement Age (NRA) reaches 67 in 2027 under current law, index both the NRA and Early Eligibility Age (EEA) to increases in life expectancy, effectively increasing the NRA to 68 by about 2050 and 69 by about 2075, and the EEA to 63 and 64 in lock step.

RECOMMENDATION 5.5: GIVE RETIREES MORE FLEXIBILITY IN CLAIMING BENEFITS AND CREATE A HARDSHIP EXEMPTION FOR THOSE WHO CANNOT WORK BEYOND 62. Allow Social Security beneficiaries to collect half of their benefits as early as age 62, and the other half at a later age. Also, direct the Social Security Administration to design a hardship exemption for those who cannot work past 62 but who do not qualify for disability benefits.

RECOMMENDATION 5.6: GRADUALLY INCREASE THE TAXABLE MAXIMUM TO COVER 90 PERCENT OF WAGES BY 2050.

RECOMMENDATION 5.7: ADOPT IMPROVED MEASURE OF CPI. Use the chained CPI, a more accurate measure of inflation, to calculate the Cost of Living Adjustment for Social Security beneficiaries.

RECOMMENDATION 5.8: COVER NEWLY HIRED STATE AND LOCAL WORKERS AFTER 2020. After 2020, mandate that all newly hired state and local workers be covered under Social Security, and require state and local pension plans to share data with Social Security.

RECOMMENDATION 5.9: DIRECT SSA TO BETTER INFORM FUTURE BENEFICIARIES ON RETIREMENT OPTIONS. Direct the Social Security Administration to improve information on retirement choices, better inform future beneficiaries on the financial implications of early retirement, and promote greater retirement savings.

RECOMMENDATION 5.10: BEGIN A BROAD DIALOGUE ON THE IMPORTANCE OF PERSONAL RETIREMENT SAVINGS.

VI. Process Reform

RECOMMENDATION 6.1: SWITCH TO A MORE ACCURATE MEASURE OF INFLATION FOR INDEXED PROVISIONS. Rely on chained CPI to index all CPI-linked provisions across government.

RECOMMENDATION 6.2: ESTABLISH A DEBT STABILIZATION PROCESS TO ENFORCE DEFICIT REDUCTION TARGETS. Establish a debt stabilization process to provide a backstop to enforce savings and keep the federal budget on path to achieve long term targets.

RECOMMENDATION 6.3: ALLOW CAP ADJUSTMENTS FOR PROGRAM INTEGRITY EFFORTS.
The Commission proposal includes cap adjustments to ensure appropriations are provided for Continuing Disability Reviews, Internal Revenue Service enforcement, and HHS and Department of Labor anti-fraud efforts (up to a specified amount).

RECOMMENDATION 6.4: REVIEW AND REFORM BUDGET CONCEPTS.
Current scoring rules and definitions cause policy makers to undervalue some policies and overvalue others. The Commission recommends a complete review of all budget scoring practices (“budget concepts”) by the budget committees, the
Congressional Budget Office, and the Office of Management and Budget.

RECOMMENDATION 6.5: DESIGN EFFECTIVE AUTOMATIC TRIGGERS FOR EXTENDED UNEMPLOYMENT BENEFITS.

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