Does Anyone in Washington Understand the Simpson-Bowles Plan?

Let our journalists help you make sense of the noise: Subscribe to the Mother Jones Daily newsletter and get a recap of 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?

IT'S NOT THAT WE'RE SCREWED WITHOUT TRUMP:

"It's that we're screwed with or without him if we can't show the public that what we do matters for the long term," writes Mother Jones CEO Monika Bauerlein as she kicks off our drive to raise $350,000 in donations from readers by July 17.

This is a big one for us. It's our first time asking for an outpouring of support since screams of FAKE NEWS and so much of what Trump stood for made everything we do so visceral. Like most newsrooms, we face incredibly hard budget realities, and it's unnerving needing to raise big money when traffic is down.

So, as we ask you to consider supporting our team's journalism, we thought we'd slow down and check in about where Mother Jones is and where we're going after the chaotic last several years. This comparatively slow moment is also an urgent one for Mother Jones: You can read more in "Slow News Is Good News," and if you're able to, please support our team's hard-hitting journalism and help us reach our big $350,000 goal with a donation today.

payment methods

IT'S NOT THAT WE'RE SCREWED WITHOUT TRUMP:

"It's that we're screwed with or without him if we can't show the public that what we do matters for the long term," writes Mother Jones CEO Monika Bauerlein as she kicks off our drive to raise $350,000 in donations from readers by July 17.

This is a big one for us. So, as we ask you to consider supporting our team's journalism, we thought we'd slow down and check in about where Mother Jones is and where we're going after the chaotic last several years. This comparatively slow moment is also an urgent one for Mother Jones: You can read more in "Slow News Is Good News," and if you're able to, please support our team's hard-hitting journalism and help us reach our big $350,000 goal with a donation today.

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