Former Senator Alan Simpson and former Clinton Chief of Staff Erskine Bowles have updated their plan that they believe will save the economy.
The new plan from Bowles, a former chief of staff to Bill Clinton, and Simpson, a former GOP senator from Wyoming, would reduce the deficit by $2.4 trillion over the next decade, according to POLITICO’s Playbook. House Republicans want to cut it by $4 trillion, while the White House has set a $1.5 trillion goal.
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.
“[W]e call for an additional $2.4 trillion of deficit reduction over the next ten years,” Playbook says. “Roughly one-quarter of those savings should come from health care reforms and another quarter from tax reform. The remaining savings should come from a combination of mandatory spending cuts, stronger discretionary caps, cross-cutting changes such as adopting the chained CPI for inflation-indexed provisions in the budget, and lower interest payments.”