Obama names Simpson and Bowles to lead fiscal commission

The president named Alan Simpson, the former Senate Republican whip, and Erskine Bowles, the former White House chief of staff for President Bill Clinton, as the co-chairmen.

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The goal of the commission, created through an executive order, is to come up with a fiscal reform plan, which could include tax increases, spending cuts and changes to entitlement programs, aimed at bringing down the deficit to a level equivalent to 3 percent of the country's economy. That's the level the White House said is sustainable over the long term.

"Everything's on the table," Obama said at a ceremony after he signed the executive order creating the commission. "That's how this thing is going to work."

Obama said Simpson and Bowles, who both served in government in the mid-1990s, the last time Congress and the White House struck a deal to balance the budget, have a "sense of civility and a sense where there's a moment where you set politics aside to try and do what's right."

Obama and proponents of the bipartisan commission in Congress have argued that a special process insulated from some of the political pressures felt by lawmakers is needed to produce a serious fiscal reform plan.

The White House expects this year's deficit to hit nearly $1.6 trillion, which would be equal to almost 11 percent of the country's Gross Domestic Product. The Obama administration predicted in its latest budget request that the deficit would come down to almost $700 billion, or about 4 percent of GDP, within five years as the economy recovers, spending cuts are enacted and the tax cuts for the rich passed during the Bush administration expire.

The commission will have 18 members, six chosen by the president, six chosen by congressional Republicans and six picked by congressional Democrats. The president is asking Congress to consider recommendations that emerge out of the commission. The executive order mandates that those recommendations have the support of at least 14 panel members to ensure the panel reports out a bipartisan proposal.

The order requires the panel finish its work by December.

Republicans in Congress have yet to decide whether they'll participate in the commission. Senate Minority Leader Mitch McConnell (R-Ky.) has warned that the commission could lead to tax hikes. 

"After trillions in new and proposed spending, Americans know our
problem is not that we tax too little, but that Washington spends too
much—that should be the focus of this commission," McConnell said Thursday in a statement.

House Republicans said the president should consider their proposal of
specific spending cuts to show that he's willing to take on deficits.
House Minority Leader John Boehner (R-Ohio) asked Obama to look at the
GOP proposal at a White House meeting last week, but Obama hasn't yet
to act on it, Boehner spokesman Michael Steel said.

"That doesn't mean we won't participate in this commission, but it
does indicate that Washington Democrats aren't serious yet about
shutting down their spending binge," Steel said.

Obama created the commission after a legislative effort failed to get the support of 60 senators. Democratic backers of the commission, including Sens. Kent Conrad (N.D.) and Evan Bayh (Ind.), have noted that seven Republicans who co-sponsored the bill didn't vote for it. But several senior Democrats, including Senate Finance Chairman Max Baucus (Mont.), also voted against the bill because they worried it would lead to major fiscal changes without being properly considered by the full Congress.

Unions and the AARP, the group that lobbies on behalf of seniors, have also questioned why the commission is necessary, arguing against giving a small group led by unelected officials the power to propose fixes to senior entitlement programs Social Security and Medicare.

"We come in as a skeptic," said David Sloane, AARP vice president for government relations and advocacy. "We believe this is a situation where in essence Congress has abdicated its responsibility."