Rundown on Obama debt commission plan

NEW YORK (CNNMoney.com) -- The final report from the Obama debt commission was approved by 11 of the 18 commission members on a strong bipartisan basis.

Even those who voted for the plan, however, stressed there were parts of it that gave them "heartburn." But they voted for it anyway because they saw it as pushing the national conversation in the right direction.

Overall, the commission's plan would reduce the country's accumulated debt to 40% of the overall economy by 2035, down from the 185% currently projected.

Here's a look at the report's topline recommendations for getting there:

Set targets: The report recommends that spending not exceed 21% of gross domestic product.

Rein in spending: The report proposes close to $200 billion in domestic and defense spending cuts in 2015. That's a key way it would meet Obama's goal of working the annual deficit down to 3% of GDP by 2015. In fact, the final report would do one better, getting the deficit to less than 2.5%.

Control health care costs: The report recommends capping growth in total federal health spending -- everything from Medicare to health insurance subsidies -- to the rate of economic growth plus 1%.

It also proposes reforming physician payments, cost-sharing with Medicare beneficiaries, malpractice law and prescription drug costs.

Set targets: The report recommends that taxes be capped at 21% of gross domestic product.

Reform tax code: The report would lower income tax rates and simplify the tax code. It would abolish the Alternative Minimum Tax -- the so-called wealth tax -- and proposes either significantly reducing or eliminating the hundreds of tax breaks in the federal code that reduce federal revenue intake by more than $1 trillion a year.

Raise gas tax: The report would raise the federal gas tax by 15 cents a gallon. It would dedicate the extra revenue to fund transportation and limit spending on projects to whatever has been collected by the increased tax that year.

The report aims to make Social Security solvent over 75 years.

Benefits: It would reduce initial benefits for wealthier retirees. And it would offer less generous annual cost-of-living adjustments for all retirees.

Retirement age: The plan would slowly usher in an increase in the retirement age from 67 to 68 by 2050 and to 69 by 2075. Over the same period, the early retirement age would increase gradually from 62 to 64. There would, however, those who are unable to work past age 62 would be offered "hardship exemptions."

Payroll tax: The report also recommends expanding over 40 years the amount of workers' income subject to the payroll tax, which funds Social Security. As a result, the amount of one's earnings subject to the payroll tax would rise to $190,000 in 2020, about $22,000 higher than it would be under current law.

Protection against poverty: To prevent seniors from falling into poverty -- a key mission of the Social Security program -- the report proposes creating a new special minimum benefit.

For low-income workers with 30 years of earnings, benefits could never fall below 125% of the poverty line in 2017, a level that would be indexed to wages thereafter. The formula would be reduced for workers with less than 30 years of earnings but more than 10.

In addition, to reduce the risk that beneficiaries run out of funds if they live to a very old age or are disabled for a long time, the report proposes a "20-year benefit bump-up." After 20 years of collecting benefits, a beneficiary would receive a benefit increase equal to 5% of the average benefit paid.

The earliest any of the recommended spending measures would take effect would be in 2012. And no tax change would begin before 2013 -- a nod to concerns that the economic recovery is still too weak to withstand any sort of belt-tightening.

"Budget cuts should start gradually so they don't interfere with the ongoing economic recovery. Growth is essential to restoring fiscal strength and balance."