The first presidential debate covered tax policy and the economy. Since the candidates brought up Simpson Bowles several times, I picked up my copy to review. If you would like to read the entire 65-page proposal, titled “The Moment of Truth” click on the title.

Otherwise, I’ll summarize the main points here – since you will be hearing a lot about it in the coming weeks.

First, what is it?

The report was published December 2010 by the National Commission on Fiscal Responsibility and Reform. This 18-member bipartisan commission, appointed by President Obama, devised a blueprint to reduce the national deficit by $4 trillion by 2020, reduce the deficit and put the nation on a better, more sustainable footing. While the “Mission and Goals” continue to be laudable almost two years later and almost unanimously agreed upon, the implementation of these objectives is the sticking point.

Where there is universal agreement…

The goals of the plan are wide ranging, comprehensive and ambitious. The “guiding principles and values” underlie the difficult choices and compromises made by the group. Here are the core principles:

1. A commitment to make America better off tomorrow than it is today.

2. Don’t disrupt the fragile economic recovery.

3. Cut and invest to promote economic growth and keep America competitive. This means cutting waste in government but at the same time investing in education, infrastructure, and establishing policies to augment economic growth and keep the US globally competitive.

4. Protect the truly disadvantaged.

5. Cut spending “we cannot afford – no exceptions” in the federal government, the tax code, entitlement spending.

6. Demand productivity and effectiveness from Washington.

7. Reform and simplify the tax code (by lowering rates and broadening the base of taxpayers).

8. Don’t make promises that we can’t keep.

9. The problem is real, and the solution will be painful requiring shared sacrifice (interest payments on the debt may reach $1 trillion annually by 2020).

10. Keep America sound over the long run.

The sticking points: Shared sacrifice — or something for everyone to hate.

The last fifty pages of the plan detail how the commission would implement these values. And they really spread the pain around, so much so that by the time Obama was presented with the final plan, not enough commission members were supportive to take the plan to Congress. The plan died, only to be resurrected repeatedly as other legislators have tried to develop a plan with less pain. Voters are also unenthusiastic given the potential limitations on beloved deductions such as the mortgage interest rate deduction or proposed increase in retirement age. (For more history, see my previous blog “Tough Choices“).

Over the next few weeks, look to The Huffman Broadsheet for discussions about specific components of Simpson Bowles that look like they’ll survive.

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