Newspaper article The Christian Science Monitor

New Simpson-Bowles Plan: How It Envisions a Sustainable Fiscal Path for US

Newspaper article The Christian Science Monitor

New Simpson-Bowles Plan: How It Envisions a Sustainable Fiscal Path for US

Article excerpt

The oracles of bipartisan debt and deficit reduction have yet another plan to get Washington on a sustainable fiscal path for the next decade and beyond.

Former White House Chief of Staff Erskine Bowles, a Democrat, and former Sen. Alan Simpson (R) of Wyoming, the co-chairs of President Obamas 2010 debt commission, laid out that plan Tuesday morning. Their proposals would pare back federal health-care spending, raise government revenue through reducing "tax preferences," and institute a mix of other cuts and policy changes that would, among other things, supplant the sequester $85 billion in automatic spending reductions that are set to hit beginning March 1.

Both men savaged the concept of the sequester at a breakfast Tuesday hosted by Politico. Stupid, stupid, stupid, Mr. Bowles said. Theres no business in the country that makes its cuts across the board.

Instead, the duo said, the negotiations between House Speaker John Boehner (R) and Mr. Obama in the run-up to the fiscal cliff nearly netted the type of wide-ranging accord they favor. And their own measure would finish the job, they said.

If these guys were this close back in December, then well pick it up from there and try to move it along, Mr. Simpson said. Its not Simpson-Bowles or Bowles-Simpson its do something.

What to do? Some $2.4 trillion in deficit reduction is needed to get Americas debt trending downward by 2023, they argued and that follows, they said, lawmakers already achieving up to $2.7 trillion in deficit reduction over the past two years. Specific changes to entitlement programs must be included this time around, the pair urged in their ever-calm and folksy style.

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Obama, by contrast, urged $1.5 trillion in further deficit reduction in a statement Tuesday.

To break down their proposal: Half of the deficit reduction over the next 10 years would come from $600 billion in lower health-care spending and $600 billion in new revenue from tax reform.

The health-care reductions would be more than double what the president endorsed in Medicare changes during his State of the Union address. But the Simpson-Bowles proposal is broader, proposing to reform the nations tort laws, reduce payments to health-care providers, and require wealthier Americans to pay more for federal health programs.

In an outline of their plan, the pair also endorsed a long-term cap on government health-care spending, which would limit growth in health outlays to the growth of the economy by 2018.

As for the other end of things, tax reform, it will irritate everyone in the US, Simpson said.

Various tax preferences deductions and credits got into the tax code by dint of heavy lobbying, Simpson noted. Defenders of such preferences would move against any changes fiercely (even thought the vast majority of tax preferences would stay in place). …

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