By Allison Brito

New Simpson-Bowles Plan Calls For Increased Cuts To Reduce Deficit

February 19, 2013 7:36 pm Category: Memo Pad 9 Comments A+ / A-
New Simpson-Bowles Plan Calls For Increased Cuts To Reduce Deficit

Former senator Alan Simpson (R-WY) and former White House Chief of Staff Erskine Bowles released an update to their much-hyped 2010 deficit reduction plan Tuesday, claiming the mantle of bipartisanship to urge the president and Congress to make a constructive effort to turn around the rising deficit.

The summary of the most recent report, titled “A Bipartisan Path Forward To Securing America’s Future,” advises the administration and members of Congress to take measures including both spending cuts and new tax revenues that will promote economic growth and cut the national debt from 73 percent to 70 percent of GDP over the next 10 years.

Simpson and Bowles state in the summary, “There is no perfect solution to our fiscal problems. 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 compromise. We understand that there will be disagreements among policymakers and experts about the exact approach and specific policies necessary to achieve deficit reduction, and we welcome their commentary.”

Their new plan would lower the deficit by an additional $2.4 trillion over 10 years by cutting earned benefit programs like Medicare and Medicaid by $600 billion, bringing in $600 billion in revenue by amending the tax code and closing loopholes, and making another $1.2 trillion cuts in spending which exclude any savings accumulated from the draw-down of troops in Afghanistan.

During a speech today at the White House, President Obama echoed the broad outline of Simpson and Bowles’ approach. “I’m willing to save hundreds of billions of dollars by enacting comprehensive tax reform that gets rid of tax loopholes and deductions for the well off and well connected, without raising tax rates,” the president said. “I believe such a balanced approach that combines tax reform with some additional spending reforms, done in a smart, thoughtful way is the best way to finish the job of deficit reduction and avoid these cuts once and for all that could hurt our economy, slow our recovery, put people out of work.” Watch the full speech here.

While they can agree on some aspects of the plan, however, President Obama and Democrats in Congress will likely view the new Simpson-Bowles plan as a non-starter, since it calls for far more spending cuts — especially in health care and Social Security — without nearly enough increases in tax revenue. The new Simpson-Bowles plan adheres to Republican demands by proposing nearly $1 trillion more in deficit reduction than its 2010 counterpart.

Under President Obama, the deficit has already been reduced by $2.5 trillion, requiring only $1.5 trillion more to meet the recommendations of the original 2010 Simpson-Bowles plan.  Opponents of the new plan justly claim that there ought to be an expansion in tax revenues and more of a reduction in spending cuts than the new Simpson-Bowles plan suggests.

Simpson and Bowles pitched their plan on MSNBC’s The Daily Rundown Tuesday morning; that interview can be seen below:

 

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Photo credit: AP/Carolyn Kaster

New Simpson-Bowles Plan Calls For Increased Cuts To Reduce Deficit Reviewed by on . Former senator Alan Simpson (R-WY) and former White House Chief of Staff Erskine Bowles released an update to their much-hyped 2010 deficit reduction plan Tuesd Former senator Alan Simpson (R-WY) and former White House Chief of Staff Erskine Bowles released an update to their much-hyped 2010 deficit reduction plan Tuesd Rating:

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  • charleo1

    It seems to me, we didn’t get to this high level of public debt because the wealthy, and the
    corporations have been taxed too much. Or because the costs of regulations are too high to make
    a profit. And, we didn’t get here, because the average worker is receiving too much income for the work preformed. Or, the health benefits, and retirement plans at work, are just too generous.
    And we didn’t develop the wealth disparity of some third world country, because the regular Joe,
    or Jane, is able to take deductions, and use loopholes to lower their tax obligation to zero,
    by taking advantages in the tax laws, that are just not available to the big oil companies.
    No, that’s not how we came to this point. Where the 400 or so of the wealthiest Americans are
    controlling more capital, than all the people in the bottom 50% combined. And, 95% of the gains realized since the economy began coming out of the recession, have profited the top 2% of Americans. While the remaining 98% of us, made due with a tiny 5%. And we wonder why
    we just can’t seem to lift demand enough to put everyone back to work as before. And how did it
    come to be, some of the largest businesses, and incorporated enterprises in the Country,
    are making record profits. While Americans are working longer hours than ever before at work. Taking work home, and taking fewer vacation days off. Now, gosh darn it! Suddenly, we’re
    going to have to start looking at Social Security? Really? Just can’t find anyway to finance it?
    Well, they can literally shove that garbage where the sun never shines!

    • rpg1408

      Thanks. I couldn’t have said it better myself. You’re right on the money (pun intended). Before cutting any benefits for the 99%, let the 1% finally pay their fair share.

  • nobsartist

    I hate to say it but America is a bad credit risk and bankrupt.

    Time to replace everyone involved in it.

    • gahoof

      Careful, nobsartist; that includes you and me (remember: “We, the people”).

      I find myself in agreement with a lot of your commentary, though.

      • nobsartist

        “we the people” became sheeple as soon as they figured out how to subvert the Constitution.

        by the way, originally the Constitution was written to prevent exactly what has happened over the last 12 years.

        however the genius’s amended it so it no longer appears to be any more than scrap paper.

        as worthless as our “money” is.

  • ORAXX

    Would cutting Medicare and Medicade make those health care costs go away? Will the elderly suddenly become healthier if there is no one there to pay for their care? No, they won’t, and those costs will continue to be absorbed by the economy. Alan Simpson needs to go back to Wyoming and be quiet.

    • charleo1

      That’s exactly what I always think! The other day, I had quite a lengthy conversation
      with an intelligent gentleman, who’s main concern was that us Liberals refuse to deal
      with reality. That Medicare has 60 trillion dollars of unfunded obligations, and so….
      Now, I don’t know where he got the number. Or, how far into the future he had to extrapolate to get to 60 trillion dollars. But, at the end of the day, the basic difference
      between his Conservative philosophy, and my Liberal one, is his included the option of
      denying medical services to those unable to pay. Mine did not. And I cannot accept
      the proposition that healthcare is like every other commodity. No different than saying,
      not everyone is entitled to drive a $500,000 sports car, or live on the beach in Malibu.
      The Republicans ask, how can a society take on such an expensive, and monumental
      task, as making sure our 300 million plus citizens have a Right to a doctor when they
      are sick, or injured. I must ask them, how can we, in all good conscience not do so?
      Conservatives will sometimes quote JFK, “Ask not what your Country can do for you,
      but, what you can do for your Country.” But I remind them, Kennedy also challenged
      the Nation when he said, “We don’t do these things because they are easy.” I would
      add, there are very few things in this world worth doing, that are easy.

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