Simpson and Bowles Keep Pushing With New Deficit Plan

PHOTO: Co-chairmen of the National Commission on Fiscal Responsibility and Reform,  Erskine Bowles, left, and former Sen. Alan Simpson, (R-WY) right, participate in a Joint Deficit Reduction Committee hearing on Capitol Hill, Nov. 1, 2011, in Washington,

Alan Simpson and Erskine Bowles are at it again.

Their broad deficit-reduction proposal failed to catch on following its release in December 2010, but the two have remained vocal about the nation's fiscal future. In a recent op-ed at Politico, they called the recent, year-end tax deal "pitiful," and urged serious, long-term reforms.

Read more: Sequestration: DC's Weird Idea of a Cut

Now, they're pushing a re-hashed plan to slow the nation's debt growth and put it on a more stable path, essentially fitting their old plan into a new timeline and pushing leaders in Washington, D.C., to adopt a piecemeal approach to fiscal reform. Taking into account actions that Congress and President Obama have taken in the last two years, Simpson and Bowles say tax and spending reforms don't have to happen all at once.

The two appeared at a breakfast hosted by Politico in downtown, Washington, D.C., Tuesday morning to promote the plan, telling the small Beltway audience that they believe a broad "grand bargain" agreement on these steps is attainable. Protesters repeatedly interrupted their onstage interview with Politico's Mike Allen, demanding Simpson and Bowles explain their calls for entitlement cuts and shouting "Pay your fair share!"

"Forget all the fear, guilt, and racism that goes into this and use your brain," Simpson said of critics, while warning that a meaningful deal is necessary for President Obama.

"He will have a failed presidency," Simpson said, if Obama fails to shift the nation's fiscal course.

Counting the 2011 budget talks and the recent tax deal as steps one and two, Simpson and Bowles issued a call for two more big steps—which include measures like lowering the growth of Medicare and Medicaid payments to providers, lowering drug costs, enacting Social Security reforms, adopting a "chained CPI" to reduce the growth of Social Security payments and other spending tied to inflation, and reforming the tax code. Those proposals (or, at very least, proposals like them) were included in the original plan approved by President Obama's fiscal commission, which Simpson and Bowles led. That plan offered more specifics on how to achieve the goals laid out by Simpson and Bowles this morning.

Read more: Bowles, Simpson Protested at Politico Breakfast

Most of these remaining steps should happen in the next two years, according to Simpson and Bowles's timeline.

"There is no perfect solution to our fiscal problems," the two wrote, introducing the new plan. "However, we believe strongly and sincerely that an agreement on a comprehensive plan to bring our debt under control is possible if both sides are able to put their sacred cows on the table in the spirit of principled compromised." They also took Congress and President Obama to task once again for the year-end tax deal, blasting it for leaving in place "the abrupt, mindless, and across-the-board spending cuts of the sequester."

Here is the list Simpson and Bowles released to reporters, detailing their plan:

Step 3: Enact Serious Tax and Entitlement Reforms and Cut Additional Spending (~$2.4 trillion)

  • Reduce Medicare and Medicaid spending by improving provider and beneficiary incentives throughout the health care system, reducing provider payments, reforming cost-sharing, increasing premiums for higher earners, adjusting benefits to account for population aging, reducing drug costs, and getting better value for our health care dollars (Feb-Dec 2013)
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