GRAY COURT, S.C. -- Republican presidential candidate Rick Perry proposed dramatic tax and spending changes yesterday, saying he would let Americans choose between a 20 percent flat tax and the current system, allow private Social Security accounts and slash government spending and regulation.
Perry, seeking to regain the momentum he enjoyed in late August, said his plan would significantly spur economic growth. But analysts from the left and right said he would need draconian federal budget cuts to avoid massive deficits.
In a pitch to conservatives, the Texas governor said his "Cut, Balance and Grow" plan was bolder than what his GOP rivals or President Barack Obama would do. His proposal calls for gradually increasing eligibility ages for Social Security and Medicare and amending the Constitution to require balanced budgets. "America is under a crushing burden of debt, and the president simply offers larger deficits and the politics of class division," Perry said in South Carolina.
After weeks of calling Social Security a "Ponzi scheme," Perry proposed major changes to the program's funding and payouts: Benefits would not change for current and soon-to-be retirees; eventually the eligibility age would rise, and wealthier people would see reduced benefits. Younger workers could steer some of their Social Security payroll taxes to private investment accounts, an idea President George W. Bush proposed.
The heart of Perry's plan would reduce or eliminate an array of taxes. He would end taxes on Social Security benefits, estates, dividends and capital gains. He would lower the corporate income tax rate as well as the personal income tax rate for those who choose his flat rate.
Herman Cain was the first presidential candidate to propose a flat tax this year.