The Budget-Reform Idea That Won’t Die

The Simpson-Bowles plan has been rejected at every turn. Why is it resurfacing now?

Alan Simpson speaks as Erskine Bowles looks on
Alan Simpson speaks as Erskine Bowles looks on (Jonathan Ernst / Reuters)

The U.S. budget is a messy and contentious political process. That fact is greatly exacerbated by the deepening political and ideological divides at work within the country. That may sound defeatist, but maybe, just maybe, the the depth of division coupled with the desire for change means that the time is finally right for the lauded but never-passed bipartisan budget-reform effort, Simpson-Bowles.

The budget agreement, put forth by Alan Simpson and Erskine Bowles in 2010, was defeated three-times before supporters figured it was time to lay the idea to rest. The duo then tried again in 2013, to the same outcome. Critics have been slamming President Trump’s budget proposal—which stands to add $2 trillion to the debt over the next few years, according to the Tax Policy Center. That’s in addition to the massive cuts to poverty initiatives and health-care funding that have left more economists, policymakers, and business executives trying to formulate better, more sustainable options.

Despite its history of continual defeat, David Cohen a senior executive at Comcast, posited that Simpson-Bowles might be the precise thing that the American economy needs right now. And Cohen apparently isn’t alone. His suggestion that the constantly resurfacing plan might be the way forward was met with large applause and echoes of “that’s exactly right” from members of the audience at the Aspen Ideas Festival, which is co-hosted by the Aspen Institute and The Atlantic.

Simpson-Bowles called for more than $1 trillion in cuts for military spending, $2.6 trillion in tax increases over a decade (including big tax hikes for wealthier Americans due to the treatment of capital gains and dividends as ordinary income), shifted charitable deductions and mortgage interested to a tax-credit capped at 12 percent, and increased both the retirement age and the maximum amount of income that could be subject to social security tax. As my colleague, Derek Thompson wrote back in 2010, “everybody found something to hate.’

In theory, that could be a good thing. The entire idea behind compromise, especially a political one in a bifurcated system is that while everyone gets some of what they want, no one gets everything that they want. But Simpson-Bowles has always occupied a really strange space in the budget reform conversation: politicians sing its praises, but refuse to actually advance it, let alone pass it. This is how The Washington Post described its place in Washington back in 2012: “Almost every politician professes to admire it, almost none of them are willing to vote for it, and almost none of its supporters know what's in it.”

And that’s unlikely to change now. Despite a continuing concern about the deficit, many of the Republicans who voted against Simpson-Bowles in the first place are still in Congress, and occupy places of greater significance, including Paul Ryan. It has also been a long time since anyone on either side of the aisle has taken the proposal all that seriously.