WASHINGTON—Deficit hawks Alan Simpson and Erskine Bowles on Tuesday will propose a detailed plan for rewriting the tax code and implementing deep new spending cuts, hoping to offer a path to compromise for Democrats and Republicans, according to an outline of the plan.
Messrs. Simpson and Bowles co-chaired the White House's 2010 deficit-reduction panel, which put together a bipartisan package of tax and spending changes that fell flat after the administration and congressional leaders took a look.
Many lawmakers left Washington for recess this week, having made little progress in talks to avert roughly $85 billion in federal spending cuts scheduled to begin March 1. These cuts will run through September unless Congress intervenes, something many analysts believe is becoming less likely each day.
Mr. Simpson, a Republican, and Mr. Bowles, a Democrat, say their proposal would reduce the federal deficit by $2.4 trillion over 10 years, more than the $1.5 trillion package that White House officials have said is their goal. Obama administration officials say any deficit-reduction package must include new tax revenue as well as spending cuts.
The new $2.4 trillion Simpson-Bowles proposal would identify $600 billion in spending reductions through changes to health-care programs such as Medicare and Medicaid. That is roughly $200 billion more than the White House has said it is willing to accept.
Another $600 billion would come from curbing or ending a number of tax breaks. This is about in line with the level of increased revenue White House officials have said they are seeking, but most Republicans have said they won't accept tax increases.
The final $1.2 trillion in the proposal would come from lower caps on discretionary spending.
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