Bowles, Simpson Release New Plan That Cuts Deficit By $2.4 Trillion

By Eyder Peralta

Published February 19, 2013 at 12:57 PM EST

Co-chairmen of the National Commission on Fiscal Responsibility and Reform, former Sen. Alan Simpson, right, and Erskine Bowles.

Just as Congress faces another self-imposed fiscal deadline, Erskine Bowles and Alan Simpson, the Democrat and Republican who were charged by the president in 2010 to present a fiscal reform plan, presented a second solution today that seeks to cut the deficit by $2.4 trillion in the next ten years.

The first Bowles-Simpson commission plan has been plenty talked about since the debate that led to the debt ceiling deal of 2011 and during every subsequent fiscal deadline. The first plan was seen by many as a "grand bargain" with real bite.

In a summary of their new plan posted on the their Moment of Truth Project website, Bowles-Simpson say "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," the pair said. "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."

As Politico reports, the new Bowles-Simpson plan puts a stake right in the middle of the debate. Instead of cutting the deficit by $4 trillion as House Republicans have proposed, or the $1.5 trillion the White House has demanded, they put the goal at $2.4 trillion.

It also does so with a combination of spending cuts and revenue increases.

It gets to the $2.4 trillion number with cuts both sides have at one point or another found unacceptable. Politico explains:

"The Bowles-Simpson plan would cut $600 billion from Medicare and Medicaid (the White House will support only $400 billion), $600 billion in new tax revenue from ending or curbing deductions and breaks (the House GOP has said all revenue is off the table) and $1.2 trillion in cuts to discretionary spending, along with cuts in cost-of-living increases for Social Security, the farm program and civilian and defense retirement programs."

Bowles, a President Clinton's chief of staff, and Simpson, a former GOP senator, told The Hill they wanted to propose a second plan to "show that a grand bargain is still possible."

As Mark reported earlier, President Obama urged Congress today to avoid the $85 billion in "automatic, severe budget cuts" that are scheduled to kick in starting March 1.