Last November, a full year before President Obama’s decisive re-election, Erskine Bowles, a co-chair of President Obama’s fiscal responsibility commission, scratched out a series of measures to reduce 10-year deficits by nearly $4 trillion in remarks before the failed deficit Super Committee.
At the time it was pitched to Democrats as a way to meet the White House’s deficit reduction goals without acceding to the GOP’s farther reaching plans to slash and privatize popular social programs. It instead included different though still controversial proposals to increase the Medicare eligibility age and cut Social Security benefits.
Now, House Speaker John Boehner is using Bowles’ back-of-the-envelope budget math as a counteroffer in negotiations with Obama to avoid automatic tax increases and across the board spending cuts early next year.Boehner outlined the proposal in a Monday letter to Obama in which he said the GOP will not support any plan that increases tax rates.
The Bowles plan, which would gradually increase the Medicare eligibility age from 65-67, and implement a less generous formula for calculating cost of living adjustments in Social Security, is the most specific proposal the GOP has offered, and resembles, in many ways, the framework Obama and Boehner nearly agreed to in debt limit negotiations last summer.
Democrats were wary of that plan then, and are warier now in the wake of their victory in November.
At the Super Committee hearing last year, at a time when Republicans were unwilling to entertain the idea of raising revenue through the tax code, co-chair Rep. Jeb Hensarling (R-TX) dismissed the suggestion out of hand.
“You’ve certainly created some excitement for the press I think,” Hensarling told Bowles. “I would say don’t necessarily believe everything you read and hear about the proceedings of this committee.”
Bowles called for $800 billion in new revenue, without resorting to using “dynamic scoring,” but not specifically from raising tax rates. He proposed raising the Medicare eligibility age, and changing government tax and spending formulas to use so-called chained CPI, reducing benefits in programs like Social Security and raising tax revenues over time by hastening workers ascent into higher tax brackets as they climb the income ladder. He proposed $300 billion in further cuts to discretionary spending, $600 billion in cuts to health care programs, and $300 billion in other mandatory spending programs, but did not spell out entirely how the cuts should be designed.
The GOP’s offer provides no further specificity about those cuts either. It is silent on how to raise $800 billion in revenue, other than to call for closing loopholes and lowering marginal rates. It says nothing about when the higher taxes would kick in.
“This is by no means an adequate long-term solution, as resolving our long-term fiscal crisis will require fundamental entitlement reform,” the letter reads. “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.”
It’s signed by Boehner, and the rest of the GOP’s leadership team, including former vice-presidential nominee Paul Ryan.