Simpson and Bowles. We’ve seen this movie before. Two unelected men with a plan -- to cut the budget deficit. Today, they called for another $2.4 trillion in austerity.
Many see it as an effort to get the two sides to the table and strike a bargain before that automatic spending cuts -- yes the dreaded sequester -- kicks in March 1. But who are they? And why does official Washington listen to them?
The dynamic budget duo is Democrat Erskine Bowles and Republican Alan Simpson. They ran a budget commission three years ago, spit out a report, which went on a shelf -- yet they’re still in the middle of our deficit conversation.
Why? Clint Stretch, senior tax policy council at Tax Analysts, says they insert themselves in it, regularly. And, their plan is in the political middle; Goldilocks in a city of very hard beds and very soft ones.
“Simpson Bowles comes down on the side of saying government ought to be bigger than Republicans would have it be, and probably smaller than Democrats would have it be,” Stretch says.
In the campaign, both Gov. Romney and President Obama cited Simpson-Bowles, favorably. And many economists dig it, says one famous one. Harvard’s Kenneth Rogoff says Simpson-Bowles kills the right tax breaks, and doesn’t raise taxes so much it stalls growth.
“I think still the original proposal they put out there is still the lightpost by which policymakers will try to guide themselves over the long-term,” Rogoff says. “At least we hope so.”
It’s not the North Star to everyone. Simpson and Bowles are urgent about deficit cutting.
Henry Aaron at the Brookings Institution says maybe not right now. The bigger problem, he says, is millions unemployed.
“That’s the primary waste we have today,” Aaron says. “Ending that waste should be job one. Job two is dealing with our longer term budget challenge.”
This view tolerates more government borrowing and spending. But the gospel of Simpson and Bowles is to push deficits just one way: down.