President Obama asks Congress to delay spending cuts to ensure health and safety programs
In an appearance today, President Obama pressed Congress to temporarily delay the $85 billion in federal spending cuts scheduled to begin March 1 that could compromise health and safety. He urged lawmakers to pass a smaller package of spending cuts and tax increases. But many Republicans have rejected a balanced approach that includes a raise in revenue.
Meanwhile, Erskine Bowles and Alan Simpson co-chairmen of the National Commission on fiscal Responsibility and Reform who first proposed a plan to address the deficit in 2011 have proposed a new plan this week. Their proposal builds on the previous report to reduce the US government deficit spending by $2.4 trillion over ten years through a combination of spending cuts, healthcare overhaul and tax reform, according to a Reuters report.
The report is being issued in an effort to encourage both Democrats and Republicans to reach a compromise before the March 1 deadline when automatic budget cuts are due to be initiated, although it is doubtful either Congress or the administration will be able to agree on a plan in time to avoid sequestration, which is only ten days away.
Under the Bowles proposal, about one-fourth of the $2.4 trillion in deficit reduction would come from healthcare reforms and another fourth from tax reform. White house officials have said repeatedly that any deficit-reduction package must include new tax revenue as well as spending cuts. The Bowles proposal identifies $600 billion in spending reductions through changes to health-care programs such as Medicare and Medicaid, although specifics of where the cuts would be were not available. That's roughly $200 billion more than the administration has said it is willing to accept.
The remaining reduction would come from a combination of mandatory spending cuts, stronger caps on U.S. discretionary spending, using the Consumer Price Index for inflation-indexed provisions in the budget and lower interest payments, according to the Wall Street Journal.
"The proposal also calls for a parallel process to make Social Security sustainably solvent and further actions to bring transportation spending and revenues in line and limit per capita cost growth in federal budgetary commitment to healthcare to about the growth rate of the economy," according to a summary of the plan.
The latest Simpson-Bowles package marks at least the fourth effort by the Democrat Alan Simpson and the Republican Erskine Bowles in the past three years to ignite public and political backing for a deficit-reduction deal. It follows their late-2012 attempt to broker a large-scale agreement between the administration and congressional leaders in order to avoid the so-called fiscal cliff.