Simpson-Bowles Commission

The National Commission on Fiscal Responsibility and Reform (often called Bowles-Simpson/Simpson-Bowles from the names of co-chairs Alan Simpson and Erskine Bowles; or NCFRR) is a Presidential Commission created in 2010 by President Barack Obama to identify "…policies to improve the fiscal situation in the medium term and to achieve fiscal sustainability over the long run." The commission first met on April 27, 2010.

A report was released on December 1, 2010, and although the Commission's recommendations were supported by over 60% of the members (11 out of 18), the report did not reach the 14-vote threshold required to formally endorse the blueprint and have it sent to Congress for approval.

The document that is referred to as the commission's final report (The Moment of Truth: Report of the National Commission on Fiscal Responsibility and Reform) is in fact a report of the co-chairs, Erskine Bowles and Alan Simpson. There is, in fact, no "final report", because the commission failed achieve a 14-member, super-majority vote to approve one.

On March 28, 2012, Representatives Jim Cooper (D-TN) and Steve LaTourette (R-OH) put a bill modeled on the plan, with, according to analyst Ezra Klein, "somewhat less in tax increases," to a vote in the House where it was rejected 382 to 38. 22 Democrats and 16 Republicans supported the bill.

Controversies

Criticism over Austerity Measures

The plan contained painful austerity measures that critics contended would further weaken the economic recovery. The plan called for cuts in benefits for the elderly, veterans, and many government employees. Most importantly, it would have cut the Social Security “cost of living” or COLA increase. Reduced COLA would amount to a benefit cut of close to 3% for a typical retired worker. Since the median income for households of people over age 65 is just $31,000, this would be a big hit to a segment of the population that is already struggling.

The report also included a proposed raise in the retirement age for Social Security eligibility to age 69 by the year 2075, a decrease in the cost of living benefits for Social Security recipients, new limits on Medicare health insurance programs, an end to several middle-class tax breaks, the elimination of funding for the Corporation for Public Broadcasting, the capping of jury awards in malpractice cases, and a major reduction in corporate income taxes.

President Obama implicitly called for cutting Social Security by 3 percent and phasing in an increase in the normal retirement age to 69 when he again endorsed the deficit reduction plan put forward by Erskine Bowles and Alan Simpson, the co-chairs of his deficit commission. According to economist Dean Baker "The reduction in benefits is the result of their proposal to reduce the size of the annual cost of living adjustment by 0.3 percentage points by using a different price index. After 10 years this would imply a reduction in benefits of 3 percent, after 20 years the reduction would be 6 percent, and after 30 years the reduction would be 9 percent. If the average beneficiary lives long enough to collect benefits for 20 years, the average reduction in benefits would be approximately 3 percent."

Speaking about the report's deficit-cutting proposals, Richard L. Trumka, President of the AFL-CIO said, "With this report the Deficit Commission once again tells working Americans to 'Drop Dead.' No proposal on fiscal issues is serious that leaves the Bush tax cuts for the rich in place while raising taxes on the middle class and slashing Social Security and Medicare."

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In a Nov. 11, 2010 appearance on Democracy Now!, Journalist Robert Kuttner had this to say about the Commission: "We’re in a prolonged recession that bears more resemblance really to a depression. And you cannot get out of a depression by austerity. The idea that you should have an arbitrary set of cuts in the deficit at a time when you need more public spending is totally perverse. It’s the economics of Herbert Hoover. It’s the politics of the Republican right. And it’s one more indication of the capture of the Obama administration by Wall Street. I mean, Erskine B. Bowles gets over $300,000 a year for attending a few meetings of Morgan Stanley, the investment bank, on whose board he sits, so he gets more money in board fees than 99 percent of Americans earn. And you’ve got three privately funded commissions by the Peterson Foundation, Pete Peterson, proposing the same stuff. It’s intended to create a drumbeat to carry out a wish list that has long been the goal of fiscal conservatives, that has nothing to do with this crisis."

Support for the Simpson-Bowles Plan - "Enact the Plan"

Despite the fact that the plan is not an official final report because it failed to reach the 14-vote threshold, the commission's recommendations are still being considered as of early 2013.

There is also an organization called Enact the Plan established to promote and encourage the implementation of the Simpson-Bowles plan. According to its website, Enact the Plan is a grassroots organization launched by Timothy J. Pagliara in Franklin, Tennessee. Their position is that enacting the Simpson-Bowles Plan would benefit all of America by reducing the national debt, which is for the common good and general welfare of the citizens of the United States.

At the launch of the Simpson-Bowles Commission it was announced that Commission would be "partnering with outside groups," such as the Peter G. Peterson Foundation's America Speaks initiative.

The Washington Post's Dan Eggen, in a Nov. 10, 2010 story titled "Many deficit commission staffers paid by outside groups," revealed that two members of the Obama Commission worked for Peterson-funded organizations. One of them was Ed Lorezen, who currently serves as the Senior Policy Advisor to the CEO of the Peter G. Peterson Foundation, and formerly served as the Concord Coalition's policy director from 2005-2007. The other was Marc Goldwein, whose salary was paid for the Peterson-funded Committee for a Responsible Federal Budget. He is a Senior Policy Analyst at the New America Foundation, an organization that also took part of the aforementioned Peterson-Pew Commission, whose conclusions about how to cut the deficit strongly mirrored those of the Obama-lead Commission.

Commission Members

Co-Chairpersons:

• Sen. Alan Simpson, former Republican Senator from Wyoming.
• Erskine Bowles, former Chief of Staff to President Clinton

Executive Director:

• Bruce Reed, former Chief Domestic Policy Adviser to President Clinton

Commissioners:

• Sen. Max Baucus (D-MT)
• Rep. Xavier Becerra (D-CA 31)
• Rep. Dave Camp (R-MI 4)
• Sen. Tom Coburn (R-OK)
• Sen. Kent Conrad (D-ND)
• David Cote, Chairman and CEO, Honeywell International
• Sen. Mike Crapo (R-ID)
• Sen. Richard Durbin (D-IL)
• Ann Fudge, Former CEO, Young & Rubicam Brands
• Sen. Judd Gregg (R-NH)
• Rep. Jeb Hensarling (R-TX 5)
• Alice Rivlin, Senior Fellow, Brookings Institute and former Director, Office of Management & Budget
• Rep. Paul Ryan (R-WI 1)
• Rep. Jan Schakowsky (D-IL 9)
• Rep. John Spratt (D-SC 5)
• Andrew Stern, President, Service Employees International Union (SEIU)