By Sheldon Alberts - 01/02/13 04:01 AM EST
The former co-chairmen of President Obama’s debt commission on Tuesday criticized Congress’s compromise budget legislation as a “missed opportunity” to address the nation’s fiscal woes.
“The deal approved today is truly a missed opportunity to do something big to reduce our long-term fiscal problems, but it is a small step forward in our efforts to reduce the federal deficit,” Bowles and Simpson said in a joint statement.
“Washington missed this magic moment to do something big to reduce the deficit, reform our tax code and fix our entitlement programs.”
The two men were appointed to lead the National Commission on Fiscal Responsibility and Reform, launched in 2010 by Obama to craft a long-term plan to tackle the country’s ballooning deficit.
They proposed a grand bargain to slash close to $4 trillion from the deficit through a combination of spending cuts and revenue increases, including tax reform.
The Bowles-Simpson proposal included reductions in Medicare and Social Security spending through a "chained" consumer price index formula that limits cost-of-living increases for recipients. It failed to gain support from the White House or Congress.
Since then, Simpson and Bowles have been critical of subsequent failed efforts — first in the summer of 2011 and again in the past several weeks — by the White House and Congress to achieve a deal as ambitious as the plan they initially laid out.
The bill passed on New Year's Day by the House and Senate will extend existing tax rates for all individuals earning up to $400,000 and households earning up to $450,000. It also extends unemployment benefits and postpones automatic sequester cuts for two months.
Republicans have vowed to fight for spending cuts as part of coming negotiations with congressional Democrats and the White House to raise the nation's debt ceiling.
Simpson and Bowles are the co-founders of the Campaign to Fix the Debt, a coalition of business leaders and politicians, including New York Mayor Michael Bloomberg.
In their statement, Bowles and Simpson said the budget agreement negotiated by Vice President Biden and Senate Minority Leader Mitch McConnellMitch McConnellReid: Judiciary a 'rubber stamp' for Trump-McConnell Iran and heavy water: Five things to know Overnight Finance: House rejects financial adviser rule; Obama rebukes Sanders on big banks MORE (R-Ky.) “follows on the $1 trillion reduction in spending that was done in last year’s Budget Control Act [of 2011]."
But “while both steps advance the efforts to put our fiscal house in order, neither one nor the combination of the two come close to solving our nation's debt and deficit problems,” they added.
The two men appealed for the president and congressional leaders to address unfinished business that was not included in the last-minute dealmaking to avoid going over the fiscal cliff.
Leaders must “now have the courage to reform our tax code and entitlement programs such that we stabilize our debt and put it on a downward path as a percent of the economy,” they said.
“We have all known for over a year that this fiscal cliff was coming. In fact, Washington politicians set it up to force themselves to seriously deal with our nation’s long-term fiscal problems,” Simpson and Bowles added. “Yet even after taking the country to the brink of economic disaster, Washington still could not forge a common-sense bipartisan consensus on a plan that stabilizes the debt.”
If there is cause for optimism, they said, it is in “the statements by the president and leaders in Congress that they recognize more work needs to be done.”
But leaders on both sides must “move beyond their comfort zone” if they are to have any chance of reaching a long-term plan to bring the debt under control.
“It is now more critical than ever that policymakers return to negotiations that will build on the terms of this agreement and the spending cuts in the Budget Control Act,” Simpson and Bowles said.
“These future negotiations will need to make the far more difficult reforms that bring spending further under control, make our entitlement programs sustainable and solvent and reform our tax code to both promote growth and produce revenue.”