With the failure of the deficit-reduction supercommittee, Congress turns its attention again to several previously disregarded bipartisan plans aimed at dealing with the federal budget mess.
Leading the way is a group of more than 140 House and Senate members who have pushed for a “go big” approach to debt reduction. Among their biggest inspirations is a $4 trillion proposal floated last year by a bipartisan panel headed by former Sen. Alan Simpson, Wyoming Republican, and Erskine Bowles, a chief of staff for President Clinton.
The 18-member White House-commissioned panel, which included current and former lawmakers from both houses of Congress, business and labor executives, and former high-ranking White House officials, identified more than $4 trillion in spending reductions by 2020 through tax reform, caps on discretionary spending, long-term entitlement reforms and health care savings.
“In the year that I have been in Washington, only the Bowles-Simpson proposal has generated bipartisan support in both houses of Congress,” wrote Sen. Joe Manchin III, West Virginia Democrat, in a letter Monday to President Obama to urge him to press for a congressional vote on the plan.
“While the Bowles-Simpson framework may not be perfect, it is the only proposal I have seen that provides pro-growth tax reform and long-term entitlement reform, while cutting our national debt.”
The plan would consolidate the tax code for individuals into three individual top rates: 12 percent, 22 percent and 28 percent. It would drop the top corporate tax rate to 26 percent from its current 35 percent.
The plan was widely praised by many outside groups as a logical and doable approach to reining in the debt, which this month topped $15 trillion. But many anti-tax Republicans bristled at the blueprint’s tax increases, even though the plan called for $3 of spending cuts for every $1 in new tax revenue.
Despite receiving support from 11 members of the commission in December, the plan was shelved after it failed to get the 14 votes needed to send it to Congress for consideration.
Yet as pessimism about the supercommittee grew in recent weeks, many on Capitol Hill have said the Bowles-Simpson plan is worth another look.
“There are some parts of [the plan] that I disagree with, but I think it’s better than doing nothing,” Sen. John McCain said Tuesday on Fox News. “And I think that we could make some significant changes” to the plan.
Some Bowles-Simpson supporters have accused Mr. Obama of failing to push the commission harder to accept the plan. But bits of the plan resurfaced in another $4 trillion deficit-reduction proposal floated this past summer by another bipartisan group, called “Gang of Six.”
The group of six senators - divided equally by party - suggested simplifying the tax code by reducing the number of tax expenditures and establishing three tax brackets with rates of 8 percent to 12 percent, 14 percent to 22 percent, and 23 percent to 29 percent.
The Senate plan also would curb the growth of Social Security benefits by moving to a lower inflation adjustment for annual cost-of-living updates. It also would reform - but not eliminate - tax expenditures for health, charitable giving, homeownership and retirement.
Another 2010 debt-reduction report by Alice Rivlin, an economist and former Clinton adviser, and former Sen. Pete Domenici, New Mexico Republican, went even further, calling for cuts that would lower the debt by almost $6 trillion by 2020.
Sixty percent of the plan would use spending cuts, and the rest would come from tax revenue. The plan also would lower the top corporate tax rate to 27 percent and establish top individual tax rates of 15 percent and 27 percent.View Entire Story
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Sean Lengell covers Congress and national politics and can be reached at email@example.com.
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