White House Fiscal Commission Proposes Contentious Budget Cuts

Erskine Bowles and former Sen. Alan Simpson, co-chairs of the National Commission on Fiscal Responsibility and Reform, today released their draft proposal for reducing the country’s budget deficit. The report includes recommendations to raise the retirement and Social Security eligibility age and increase Medicaid co-payments, two often contested issues between Democrats and Republicans.

“We have a patriotic duty to come together on a plan that will make America better off tomorrow than it is today,” the report states. Overall goals include capping spending at 21 percent of GDP, reducing White House and Congressional budgets by 15 percent and providing $200 billion in domestic and defense savings in 2015.

Bowles and Simpson’s report will be voted on by the 18-member bipartisan commission to determine if the recommendations will go into effect. To pass, it will need the support of at least 14 members, who have demonstrated highly divided opinions.

“This is not a package that I could support,” said Rep. Jan Schakowsky (D-Illinois), according to Bloomberg News.

Many of the commission members called the plan a “starting point.” Sen. Dick Durbin (D-Illinois) said, “We’re not going to have an up-or-down vote on this. There are proposals that are painful … there are things in here which inspire me and other things which I hate.” Rep. Jeb Hensarling (R-Texas) similarly stated, “Some of it I like, some of it disturbs me.”

In addition to Medicare cuts and raising the retirement age, the proposal also recommends freezing the federal worker raises through 2014, cutting subsidized student loans and establishing co-pays in the US Department of Veterans Affairs (VA) medical system. On the defense side, Bowles and Simpson recommend reducing military forces in Europe and Asia by one-third and raising the amount of defense contractor positions scheduled for elimination by 20 percent.

Budget Chair Kent Conrad (D-North Dakota) and Sen. Judd Gregg (R-New Hampshire) both released statements that echoed the sentiment of the commission members.

“The proposal that the Co-Chairmen of the Commission have put forward is an aggressive and comprehensive plan for getting federal spending, deficits and the debt under control. I look forward to reviewing it in depth and hopefully improving on it … This will not be the final proposal, but it is a significant step down the path of establishing fiscal responsibility,” Gregg stated.

Conrad said, “We have now received a proposal from the bipartisan co-chairs of the President’s Fiscal Commission, Erskine Bowles and Alan Simpson. This is not the conclusion of the commission’s work. This is the beginning. I commend them for putting together a serious proposal. It reveals just how difficult it is to put the nation on a sound fiscal course … We will have a chance to offer alternatives as we advance the process later today and next week.”