In his most recent proposal to resolve the fiscal showdown and reduce the budget deficit, President Barack Obama offers approximately 90 percent of the overall amount of spending cuts proposed in the bipartisan deficit reduction plan authored in 2010 by former Sen. Alan Simpson (R-WY) and former White House Chief of Staff Erskine Bowles—the co-chairs of the president’s 2010 fiscal commission. The proposed revenue increases in the president’s offer are about 60 percent of those proposed by Simpson-Bowles.
With this proposal, President Obama is clearly trying to find a reasonable middle ground that both Republicans and Democrats can agree on. Given how often conservatives cite the Simpson-Bowles plan as a model of bipartisan compromise, only the most ideologically blinded lawmakers could reject a plan that has 90 percent of Simpson-Bowles spending cuts and 60 percent of the plan’s revenue for having too much revenue.
The Simpson-Bowles plan included about $2.7 trillion in noninterest spending cuts over the next 10 years, along with another $600 billion in cuts from reduced interest payments on the national debt, which together total $3.3 trillion in spending cuts. President Obama has already signed $1.7 trillion of spending cuts into law—including interest savings. His latest proposal offers another $1.2 trillion in additional spending cuts, for a total of $2.9 trillion. That’s nearly 90 percent of the total spending cuts proposed by Simpson-Bowles.
In addition to the overall amount of spending cuts, the president’s plan also proposes similar, though not precisely identical, cuts within budget categories:
- Simpson-Bowles proposed $1.6 trillion in discretionary cuts. With the $200 billion in cuts that the president has offered in this area—on top of those already enacted—the president’s plan has $1.7 trillion in cuts to discretionary spending.
- Simpson-Bowles called for about $460 billion in health care cuts. The president’s plan includes $400 billion in such cuts.
- Simpson-Bowles included $260 billion in cuts to other mandatory programs (not including the effects of switching to a different measure of inflation). President Obama’s proposal includes $200 billion in these cuts.
On the tax side of the ledger, Simpson-Bowles advocated for a total of about $2.2 trillion in new revenue —$850 billion from allowing the upper-income Bush tax cuts to expire, plus another nearly $1.4 trillion from a broader tax reform. President Obama’s offer calls for less than $1.3 trillion in new revenue, which is about 60 percent of the levels proposed by Simpson-Bowles.
Notes on calculations:
Simpson-Bowles spending and revenue proposals are based on the Moment of Truth Project’s “Updated Estimates of the Fiscal Commission Proposal.” Those estimates only project out to 2021, so 2022 effects —necessary to compare equivalent 10-year impacts—are extrapolated.
Some estimates of the Simpson-Bowles revenue proposal have found higher overall levels. The Center on Budget and Policy Priorities, for example, estimates that Simpson-Bowles called for $2.6 trillion in new revenue.
Michael Linden is the Director of Tax and Budget Policy at the Center for American Progress.