Deficit commission to present revised proposal

Reporting from Washington —  The leaders of President Obama’s deficit commission say that the final proposal they will introduce Wednesday may not have enough votes to advance, but will offer an honest blueprint to follow in order to address the nation’s fiscal challenges.

Initial proposals introduced Nov. 10 by the co-chairmen of the Bipartisan Commission on Fiscal Responsibility and Reform -- former Republican Sen. Alan Simpson and President Clinton’s former chief of staff Erskine Bowles -- were widely seen as provocative and criticized most vehemently by the left. Members of the 18-member panel have since met multiple times, and while the final plan incorporates proposals of other members, it will not be “watered down.”

“I don’t know if we’ll get two votes, five votes, 10 votes or 14 votes,” Bowles said. “There are plenty of reasons not to vote for this plan, but one thing is certain: The problems are real, the solutions are painful and there are no easy choices.”

The final plan needs 14 votes to be moved forward to Congress. That vote will take place Friday, so that members will have sufficient time to reflect on the revised draft. It is not yet clear whether a consensus was reached, and Bowles and Simpson each acknowledged the challenge of doing so.

“We haven’t been on our knees trying to beat up anybody. We just say if it doesn’t happen, it doesn’t happen,” Simpson said. “At least we got two votes, which is really progress.”

“What America needs is a plan. They don’t need partial solutions,” Bowles said.

The initial plan suggested major cuts in domestic and military spending and an overhaul of the tax code to boost revenue. Among the changes are higher payments for Medicare patients, increased gas taxes and the delay of full Social Security benefits until age 68.

It also outlined $200 billion in domestic and military spending cuts, including a three-year freeze in pay for all federal employees. Obama on Monday proposed a two-year freeze on non-military federal employees, a move the co-chairmen saw as a good start.

Without specifying how the final plan would differ from the draft, the co-chairmen focused Tuesday on revisions to the federal tax code -- a subject that was at the heart of a meeting across town at the White House between Obama and congressional leadership.

While lawmakers discussed the fate of the Bush-era tax cuts, the deficit commission report would recommend a radical overhaul of the entire tax structure. The commission calls for eliminating $1.1 trillion in deductions for things such as mortgage payments -- which the co-chairmen called “tax earmarks” -- in favor of an across-the-board reduction in income tax rates.

Under the commission’s proposal, Americans would be taxed at a rate of 8% on their first $70,000 in income, 14% up to $210,000 and 23% beyond that. These changes, in addition to a reduction in the corporate tax rate, would “make America one of the best places to start and own a business,” Bowles said.

The panel is also bracing for a hostile reception to its plan, as it faced earlier this month when the draft was released.

“They’re going to rip this thing to shreds, and do it with zeal,” Simpson said. But beyond the rhetoric, he added, “We’re not balancing the books of America on the backs of poor Social Security recipients.”

In addition to their consultation with the 16 other commission members, Bowles and Simpson met Tuesday with Vice President Joe Biden. There was no plan yet to meet with Obama, but they thanked the White House for a “fair hearing.”

Because of time constraints, the commission’s final plan would not include legislative language to fast-track the adoption of its proposals. Simpson said that Senate Majority Leader Harry Reid had promised that, if the plan was adopted, it could be heard early in the new Congress, which convenes in January. House Speaker-elect John Boehner has not yet indicated the same.

mmemoli@tribune.com

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