Top House Dems offer mixed reaction to new Bowles-Simpson deficit plan

Top House Democrats on Friday offered a mixed reaction to the new deficit plan presented by Erskine Bowles and Alan Simpson.

House Minority Whip Steny Hoyer (D-Md.) and Budget Committee ranking member Chris Van Hollen (D-Md.) both offered support for the original 2010 Bowles-Simpson deficit plan. Their support contrasted with quick condemnation from House Minority Leader Nancy Pelosi (D-Calif.), who was angered by the cuts to Social Security. 

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On Friday, Van Hollen criticized the new Bowles-Simpson plan, while Hoyer offered measured praise.

“Once again, Bowles-Simpson shows us that only a big, balanced solution, which combines smart, targeted cuts to spending with new revenues, can achieve the savings we need to restore fiscal discipline, provide certainty to our private sector, and invest in economic competitiveness to create middle-class jobs,” Hoyer said. 

“Democrats understand that, and our budget proposals reflect it. I hope Republicans take note, put partisanship aside and recognize that balance is essential to the kind of agreement we need to reach,” Hoyer added.


Van Hollen, however, said that Bowles and Simpson’s new plan is a step in the wrong direction. 

"As a supporter of the original Simpson-Bowles Commission framework, I'm concerned that this new effort moves the goal posts significantly and represents a less balanced approach,” Van Hollen said.

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Bowles said Friday that his new plan is 76 percent spending cuts and 24 percent revenue increases when changes already adopted by Congress since 2010 are taken into account.  That is roughly in line with the 70 percent to 30 percent ratio the 2010 Fiscal Commission report presented.

A Democratic aide said that the old plan had more revenue in its baseline assumption that tax cuts for those making more than $250,000 a year would be ended. In January, Congress allowed taxes to rise on families making more than $450,000 instead. 

Ed Lorenzen, who helped develop the new plan for the Moment of Truth Project run by Bowles and Simpson, defended the new plan.

“While the plan may have “moved to the right” in terms of the mix of spending and revenues compared to the Fiscal Commission, it “moved to the left” of the Fiscal Commission in terms of providing low-income protections in areas such as reforms of Medicare cost-sharing and chained CPI,” he said.

He said that when baseline tax revenue was factored into the old plan, the ratio of tax to spending cuts was 60 percent to 40 percent. The new plan takes gas tax and Social Security payroll tax revenue and puts it into a future long-term step, however. The ratio in the old plan is closer to 70 percent to 30 percent, he said. 

“When those two tax increases in the commission plan are excluded to provide an apples to apples comparison to the plan released today, the revenues are closer to 36 percent of the total deficit reduction (approximately $1.7 trillion of revenues out of approximately $4.7 trillion in deficit reduction),” Lorenzen said.  

“The plan that Simpson and Bowles released today was not intended to be an update of the Fiscal Commission plan, but rather was intended to build from the negotiations between the president and Speaker last December, which provided a very different starting point. The plan is at the high end of the revenue levels being discussed in those negotiations,” Lorenzen added.

He noted that President Obama said the original Fiscal Commission tax reform plan raised too much revenue, out of concern for middle-class tax breaks it eliminated. 

The White House and the office of Senate Budget Committee Chairwoman Patty Murray (D-Wash.) did not respond to requests for comment on the new Bowles-Simpson report Friday. A spokesman for House Budget Committee Chairman Paul Ryan (R-Wis.) said the report was under review.