significant increases in tax rates. the deal to be done is to look at the tax preferences and walk them back in some intelligent way. tax expenditures or tax preferences add up to about $1.3 trillion aie. that s more than all individual and corporate tax collections combined. so there are at least some theoretical savings to be had, bill. bill: what are they, then, jim, and are they the kind of thing that members of both parties could eventually agree to. the list of the existing preferences includes easy targets such as ethanol subsidies for instance which congress is already after and many smaller deductions and credits, but the big deductions are things millions of americans know and use. the largest is making employer provided health insurance tax-free, which if taxed would bring in $282 billion a year. then there s the home mortgage interest deduction. that is the second largest at $89 billion, followed by savings in 401ks at $63 billion, and deductions
corporate tax collections combined, so there are at least theoretical savings to be had. the list of existing reference preferences include easy targets such as ethanol subsidies which congress is already after and many smaller deductions in credit, but the big deductions are things millions of americans know and love, the largest is making employer-provided health insurance tax-free, which if taxed would bring in $282 billion a year. the home mortgage interest deduction is the second largest at $89 billion, followed by the savings in 401ks at $63 billion, and deductions for charitable contributions at $40 billion. a lot of programs for the poor are also handled through the tax code. so the choices will be difficult, but this is the only real possibility for an agreement to increase revenues. jenna: this is an elegant way to kind of thread this needle between those who don t want to raise any revenues for the decifit and those who want to focus on
democrats said we ll pass our own budget because they had the majority and they did, they put a budget through. meanwhile they got to mr. change s hands, who is a controller, he says guys, you can t pass this budget, it s $2 billion short. we have $89 billion in spending, $87 billion in revenue. they were fudging the numbers. so he said guess what, guys, no soup for you, your paychecks have stopped and there s a big uproar saying why is change holding back our paychecking. this is saving $51,000 a day. one legislator said i entered public service, now i have to explain for my wife and daughter we won t be able to pay the bills because a politician chose to grand stand. he s not grandstanding. john change is the controller. he has to look at the judges and if he sees something that s not right, he s got to point it out. by the way, he found $1.3 billion in education spending. we ve got to leave it there. all right. heather: how about that,
the big issues, and we talked about it with michelle bachmann is what to do about medicare. and let s put up the differences, paul ryan s g.o.p. budget plan, calls for $389 billion in cuts and would turn medicare into a voucher plan and president obama would cut $00 billion by having an independent panel find savings, somewhere. question, according to the polls, most voters think that republicans are in effect, by this if they follow the ryan plan, taking away for seniors some of their health care. here s what i tell the public. you cannot balance the budget unless you deal with entitlements and ronald reagan and tip o neill showed us the way forward and the gang of 6 is creating the dynamic that leads to solutionses. when obama, president obama tried to overhaul the health care system in a partisan way it cost his party. and when president bush tried to reform social security and couldn t get one democrat, it failed. and, so, medicare has to be reached, i like what ryan did.
ali velshi isn t in this chair. reporter: one way to reduce deficits or shortfalls is to cut non-security, nondiscretionary spending. that s the stuff that isn t the kmai medicaid, the medicare, and the medicaid, the medicare, and social security. the president s debt commission wants to cut it by $2.2 trillion. the republican or ryan plan wants to cut $2.7 trillion over ten years. the president s plan, which he announced, wants to cuts $1.1 trillion over 12 years. now one of the major criticisms is that no party has been prepared to make the cuts to some of the biggest things we spend on like medicare and medicaid. so let me give you a sense of what the two parties what the three plans want to do with medicare and medicaid. first of all, the republicans go a lot further than the president does. they want to cut $389 billion from medicare, $735 billion from medicaid. the president s plan calls for by the way, that s over ten years. the president s plan calls for a