A new plan by longtime Washington politicos and budget experts Erskine Bowles and Alan Simpson offers the most reasonable plan yet for solving the growing U.S. deficit and setting us on a long-term path to a sustainable economy.
There is something for every political stripe in the proposal. There are common-sense ideas that appeal to the practical realities more and more Americans are coming to understand.
The deficit reduction target, at $2.4 trillion over 10 years, is between President Obama’s target of $1.5 trillion and Republicans’ goal of $4 trillion. The new Simpson-Bowles plan cuts spending and raises revenue. It removes business tax loopholes or breaks considered important by Republicans but reforms and trims spending on Medicare and Social Security that Democrats hold dear.
The plan is honest. It deals with hard realities that all Americans need to face sooner than later. Spending must be cut. Revenue must be raised. Deficits must be trimmed. That means Republican and Democratic constituencies will have to contribute.
Spending cuts and closing of tax loopholes are balanced. The plan aims to cut $600 billion in spending by changing parts of expensive health care programs Medicare and Medicaid. The cost reductions will come from a variety of common-sense ideas: cutting payments to providers, creating more incentives for patients to stay healthy, raising premiums for high earners and reducing drug costs.
Another $600 billion will be raised by closing tax loopholes. The final $1.2 trillion in cuts would come from change in inflation calculations for a number of programs, including Social Security, farm subsidies, and military and civilian retirement benefits.
Americans of all stripes should learn the details of this plan. In poll after poll, Americans are behind deficit reduction and creating a sound fiscal footing for the future. This is a plan that will help that happen. But everyone must participate. Everyone must sacrifice.
Now, it is up to our political leaders to have the courage to look Americans straight in the eye and tell them so.
And then they need to get it done.
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