A panel of Democrats, Republicans, economists and other experts is set to say Wednesday that a complete overhaul of the US tax code is the best way to address the nation's fiscal problems -- a new and likely controversial idea aimed at tackling the growing deficit.

The report, co-authored by Democratic budget veteran Alice Rivlin and former Sen. Pete Domenici (R-NM), follows a separate proposal last week by the two chairmen of President Barack Obama's deficit commission. The many similarities between the two offer a window into the types of proposals that might win backing as Washington launches into what is likely to be a protracted debate on deficit cutting.

The most recent report, put together by a group called the Bipartisan Policy Center, will call for a one-year payroll tax holiday in 2011 that it says will create between 2.5 million and seven million jobs.

The plan would lower income and corporate tax rates and offset them with a 6.5 percent national sales or "consumption" tax as well as an excise tax on sugar drinks like soda.

The Bipartisan Policy Center was created in 2007 by former Senate Majority Leaders Howard Baker, Tom Daschle, Bob Dole and George Mitchell with the aim of finding solutions to major national issues.

Last week's proposal, from Democrat Erskine Bowles and Republican former Sen. Alan Simpson, also called for an overhaul of tax and spending programs. Other similarities include:

• Changing the formula for social-security taxes so that they are levied against 90 percent of all wages, compared with the current system, which caps the tax at a certain income level.

• Major cuts in discretionary spending. Both singled out a government policy that allows military retirees to collect full benefits after 20 years.

• Cuts to farm subsidies and either eliminating or limiting certain politically popular tax breaks, such as the mortgage-interest tax deduction.

Because the proposals touch so many key parts of the economy, from taxes to spending, they have triggered opposition. The latest came Tuesday, when Defense Secretary Robert Gates said the proposal by Bowles and Simpson to cut $100 billion from defense spending would have a "catastrophic" impact on national security.

Treasury Secretary Timothy Geithner said at The Wall Street Journal's CEO Council in Washington Tuesday that the administration was waiting to see what the specific proposals looked like before it weighs in on specifics. He said the ideal situation would combine short-term fiscal policies that help sustain growth with medium and long-term policies that cut the debt.

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