Remember the National Commission on Fiscal Responsibility and Reform? You might also know it as the Deficit Commission or Simpson-Bowles.
Two years ago, this commission put forth a proposal with recommendations for achieving long term deficit reduction. The Commission said that its plan would do the following:
- Achieve nearly $4 trillion in deficit reduction through 2020, more than any effort in the nation’s history.
- Reduce the deficit to 2.3% of GDP by 2015 (2.4% excluding Social Security reform), exceeding President’s goal of primary balance (about 3% of GDP).
- Sharply reduce tax rates, abolish the AMT, and cut backdoor spending in the tax code.
- Cap revenue at 21% of GDP and get spending below 22% and eventually to 21%.
- Ensure lasting Social Security solvency, prevent the projected 22% cuts to come in 2037, reduce elderly poverty, and distribute the burden fairly.
- Stabilize debt by 2014 and reduce debt to 60% of GDP by 2023 and 40% by 2035.
We wrote about it at the time, highlighting some of the cuts that were being recommended to the federal workforce as part of the plan. Some of the key points included:
- Impose a three-year pay freeze on federal workers and Defense Department civilians.
- Reduce the size of the federal workforce through attrition.
On this point, the Commission recommends “doing more with less” and cutting the federal workforce by 200,000 (10 percent). - Reduce federal travel, printing, and vehicle budgets.
For more details on the Commission’s report, see Commission Proposes “High-Three” to “High-Five” for Retirement, Pay Freeze and Changes to FEHB for Federal Employees.
The Commission’s proposal ultimately went nowhere, failing to get the required number of votes to have it advance.
So why does any of this matter now? Because the Republicans released their counter-proposal to the White House today in the “fiscal cliff” debate. In short, the GOP proposal is to use the Deficit Commission’s plan as a blueprint for an immediate solution to avert the “fiscal cliff.” While it’s unlikely that this plan will become the blueprint for a final plan for next year, it has brought it back into the spotlight.
An excerpt from a letter GOP leaders sent to the White House states:
With the fiscal cliff nearing, our priority remains finding a reasonable solution that can pass both the House and the Senate, and be signed into law in the next couple of weeks. The best way to do this is by learning from and building on the bipartisan discussions that have occurred during this Congress, including the Biden Group, the Joint Select Committee, and our negotiations leading up to the Budget Control Act.
For instance, on November 1 of last year, Erskine Bowles, the co-chair of your debt commission, presented the Joint Select Committee with a middle ground approach that garnered praise from many fiscal watchdogs and nonpartisan experts. He recommended that both parties agree to a balanced package that includes significant spending cuts as well as $800 billion in new revenue.
This is by no means an adequate long-term solution, as resolving our long-term fiscal crisis will require fundamental entitlement reform. Indeed, the Bowles plan is exactly the kind of imperfect, but fair middle ground that allows us to avert the fiscal cliff without hurting our economy and destroying jobs. We believe it warrants immediate consideration.
Erskine Bowles rejected Boehner’s comparison to his original plan Monday, saying in a statement that he “simply took the mid-point of the public offers put forward during the negotiations to demonstrate where I thought a deal could be reached at that time.”
Does this mean the federal workforce is about to get put onto the chopping block for spending cuts? Not necessarily. What was put forward today is just a proposal countering the Democrats’ plan. Until the two sides reach a final agreement, no definitive action is likely to be taken in terms of acting on the Deficit Commission’s recommendations.
