Does Anyone in Washington Understand the Simpson-Bowles Plan?

Fight disinformation: Sign up for the free Mother Jones Daily newsletter and follow the news that matters.

Steve Benen draws my attention to Sen. Lindsey Graham’s comments on Face the Nation yesterday regarding a “grand bargain” on deficit reduction:

“Say yes to Simpson-Bowles, Mr. President. I’m willing to say yes to Simpson-Bowles,” Graham said. Graham said Washington needs more revenue, but that the revenue should come from closing tax loopholes and deductions for the rich, not from raising tax rates. “Mr. President, if you will say yes to Simpson-Bowles when it comes to revenue, so will I and so will most Republicans. We can get revenue without destroying jobs,” Graham said.

Really? Most Republicans will agree to this? Can we talk?

First: Of the $2.1 trillion in discretionary spending cuts proposed by Simpson-Bowles, we’ve already enacted $1.5 trillion of them. That doesn’t count any of the fiscal cliff/staircase stuff, either. It’s all solid cuts. So if we “say yes” to Simpson-Bowles, it means we’re saying yes to only a small amount of additional discretionary cuts. (There are also some Social Security and Medicare proposals in the plan, but for now I’m just focusing on the tax and discretionary spending stuff.)

Second: Has Graham actually read the tax proposal in Simpson-Bowles? I’ve annotated it below for easy reference, but just to hit some of the highlights:

  • Itemized deductions go away completely, replaced by a tax credit capped at 12% of income.
  • The capital gains rate would increase from 15% to 28%.
  • On average, about a quarter of the value of your health benefits would be subject to tax. This would go up over time.
  • Tax-free municipal and state bonds would be eliminated.
  • “Nearly all other” tax expenditures would also be eliminated. This sounds easy when you put it like that, but every one of those tax expenditures has a constituency. Just because you’ve never heard of them doesn’t mean no one cares about them

Does Graham really think Republicans would agree to this? It’s true that ordinary income tax rates would go down under this proposal, but total taxes paid would go up significantly, especially at the high end. House Republicans refused to support this back when it was first proposed, and I can’t think of any reason they’d support it now. Especially when this $2.6 trillion tax increase would be complemented by only modest additional discretionary spending cuts. What does Graham think he knows that I don’t?

TIME IS RUNNING OUT!

We have an ambitious $350,000 online fundraising goal this month and it's truly crunch time: About 15 percent of our yearly online giving usually comes in during the final week of the year, and in "No Cute Headlines or Manipulative BS," we explain why we simply can't afford to come up short right now.

The bottom line: Corporations and powerful people with deep pockets will never sustain the type of journalism Mother Jones exists to do. And advertising or profit-driven ownership groups will never make time-intensive, in-depth reporting viable.

That's why donations big and small make up 74 percent of our budget this year. There is no backup to keep us going, no alternate revenue source, no secret benefactor. If readers don’t donate, we won’t be here. It's that simple.

And if you can help us out with a donation right now, all online gifts will be matched thanks to an incredibly generous matching gift pledge.

payment methods

TIME IS RUNNING OUT!

We have an ambitious $350,000 online fundraising goal this month and it's truly crunch time: About 15 percent of our yearly online giving usually comes in during the final week of the year, and in "No Cute Headlines or Manipulative BS," we explain why we simply can't afford to come up short right now.

The bottom line: Corporations and powerful people with deep pockets will never sustain the type of journalism Mother Jones exists to do. And advertising or profit-driven ownership groups will never make time-intensive, in-depth reporting viable.

That's why donations big and small make up 74 percent of our budget this year. There is no backup to keep us going, no alternate revenue source, no secret benefactor. If readers don’t donate, we won’t be here. It's that simple.

And if you can help us out with a donation right now, all online gifts will be matched thanks to an incredibly generous matching gift pledge.

payment methods

We Recommend

Latest

Sign up for our free newsletter

Subscribe to the Mother Jones Daily to have our top stories delivered directly to your inbox.

Get our award-winning magazine

Save big on a full year of investigations, ideas, and insights.

Subscribe

Support our journalism

Help Mother Jones' reporters dig deep with a tax-deductible donation.

Donate