Deficit Panel Leaders Unveil "Moment of Truth" Plan (Full Text)

The leaders of President Obama's bipartisan deficit commission released their official plan for deficit reduction today, standing by their controversial proposals to double the gas tax, raise the retirement age to receive Social Security payouts, cut Medicare and lay off hundreds of thousands of federal workers.

Deficit Plan Proves Offensive to All, Leaders Admit, but Plan Gets Some Support

Commission co-chairs Alan Simpson and Erskine Bowles are presenting the final plan in a public meeting of the 18-member commission this morning. In order for the plan to have a serious chance to come up for a vote before Congress, 14 of the 18 commission members need to approve it. Simpson and Bowles acknowledged yesterday to reporters that their fellow commission members may not approve the report. However, they declared that their efforts have already been proven successful by the level of discussion about deficit reduction in Washington.

Bowles declared that the deficit is like a "cancer" that must be addressed immediately. The commission co-chairs underscored that point by naming their final report "The Moment of Truth."

Read the full report below:

---

Stephanie Condon is a political reporter for CBSNews.com. You can read more of her posts here. Follow Hotsheet on Facebook and Twitter.

[RealiteBites]

I can tell that these gentlemen truly believe that what they're doing is noble and for the good of the country. But I also think to TRULY be noble, in a democracy one has to be completely honest with people, and not withhold information because they feel like people are 'weak' and won't act the way they want them to.

Because otherwise they're essentially preying on peoples' desire to feel like there's certitude where none exists, because people don't have the knowledge and/or ability to put their suggestion into the context of the bigger more complicated picture and draw for themselves the ramifications of this course of action in light of the alternatives.

Like yes, if the deficit continues on the same path, the debt will grow, it raises the chances of default, it might make it harder to borrow in the future which might raise interest rates, the path is unsustainable in that interest payments are growing so much there's soon not going to be any money left to pay for anything else.

On the other hand, they should have disclosed that the reason the deficit is 8% of GDP is because without it, the current growth rate of GDP of 2% would be -6% and we'd be in a severe recession with like 15% unemployment, and even less tax revenue with which to pay for even fewer social services.

I don't think it's right to let people think that cutting government spending is just like cutting back one's spending at home, because it's not because of the size difference. So while it's great that this panel has raised awareness of the dangers of continuing along this path of deficit tax cuts and spending, I think they needed to be equally honest about how bad the economy really is that the government has needed to run an 8% deficit in the first place just to avoid a recession. Even like Jeb Hensarling and Paul Ryan want to keep running an 8% deficit with the tax cuts for the rich to avoid a recession, don't they? And don't Bowles/Simpson as well? So they need to be honest with people about how tough a spot this really is ...

I don't think it's ethical to withhold information and pray on peoples' weaknesses like this ...

[tvonfeldt]

Seniors, before you jump on these guys for messing with Socil Security read that section of the report. I have to say that their recommendation looks as good as any I've seen. The only part that you may call into question is using a new Consumer Price Index CPI which we all know the current one has been questioned for years. Other than that this sounds pretty good.

The issue of Medicare is another story but not as big a deal to help fix the deficit. They just didn't recommed it. That is the repeal of laws that disallows the government from negotiating drug prices for Medicare drugs. These laws are preposterous. Some people have said that these laws protect the drug companies from government price fixing. Are you kidding? Tell me the company that doesn't negotiate prices on vertually anything they buy. The government negotiates drug prices for the VA and Medicaid. The result on average a 48% savings. You might say so? Well it is projected that the government will spend 787 Billion Dollars on drugs for Medicare thru 2018. Think about it. A 48% savings would amount to 348 Billion Dollars. Now that ain't chicken feed.

I wonder why the panel didn't make this recommendation. Well it doesn't take a rocket scientist to figure that one out.

[newsterI]

WHAT?? only 58 pages long, where's the usual 1,500 page encyclopedia set sized things these idiots USUALLY come up with?

[rightbehind]

They've had their moment of glory. Now turn out the lights.

[LadyA4]

Get rid of the illegals! You will SAVE A TON of money and Jobs!

[Ducvbui]

Sell off Alaska for $10 Tril.

(Split either CA or TX into two states...so that we don't mess up or 50-states flag design.)

Or...invade and takeover Canada, then sell it off.

[web6242a]

David Stockman ( A Lifelong Republican, and Reagan's Budget Director) has castigated both parties as not being realistic, in regard to the fiscal State of the Union. He says the Dems need to cut spending - and the Republican's need to drop the, "tax cuts fixes everything' philosophical lie. In his mind, we need both spending cuts, and raised taxes. Neither the left ,nor the right, are taking the Country's fiscal health to account. We currently have the lowest taxes in 70 years(according to the IRS) ---- If tax cuts spur growth, one must ask the GOP why, after 8 years of the Bush tax cuts, the Country is flirting with insolvency? ---Tax cuts paid for with borrowed Chinese money is a prescription for disaster!!!! The truth is, we need both spending cuts and more Revenue. The upper 2% during WW2 were taxed at a 94% margin. Today's American whiners balk at 35%. The fact is -- Income tax is a bad, politically divisive, inequitable income source. It feeds the two party Gridlock--- I say --- Repeal/Replace income tax with a National Sales Tax -- Exempting Food and Medicine, with a Tax Credit/ Stipend for the Poor and Elderly, and a 10% deduction for domestic product purchases. A National Sales Tax would allow us to tax Imports, without breaking the lousy trade agreements both parties have signed. This would put some of our tax burden on Foreign entities. I say Repeal/ Replace Income tax for a real solution!!!

[californiadreaming1]

Not really. State income taxes have been going up for years. The IRS knows that.

[RobAla]

This article states that "the deficit plan is offensive to all". Actually, the ridiculous national debt should be offensive to all. President Obams's and Nancy Pelosi's record breaking $1.3 trillion deficit for the year should be offensive to all. The irresponsible jerk politicians from both parties, who accumulated this irresponsible debt, should be offensive to all. Let's get real.

[RealiteBites]

I feel like this focus on deficits is a distraction because people don't feel confident about how to grow the economy, and so they focus on spending because it makes them feel more in control.

But in reality the only way to regain control would be to attack the ugly head on - the ugly being the helplessness and confusion people feel about how to grow the economy in a climate of increased global competition.

Deficits are just a symptom, they're not the problem ...

[RealiteBites]

... meaning that like after all that spending is cut, there's still not going to be a manufacturing base if nobody does an audit of trade relationships, and banking's still going to comprise 41% of the economy if nobody looks to see which industries hold the promise of becoming competitive on the global market ...

[RobAla]

RealiteBites" Wow! The focus on the debt is not the distraction; it has been the distraction from dealing with the dangers of this irresponsible debt that is the problem. Deficits are more than a symptom, they are real situations which will drag this nation into disaster if we continue to ignore them. Look at the bankrupt socialist democracies in Europe- we are a step away from them. It is is time to stop pretending. Wow! I wish you well, but I think you are not looking at reality. We have tow huge problems that need immediate attention. 1) Continued high unemployment and 2) the horrible national debt that eats up 20% of our national budget just to pay the interest on it. We have serious problems that have come to a head, and we can not afford to pretend that they will go away on their own.

[RealiteBites]

So the deficit is now 8% of GDP, and the actual GDP growth is like 2%? So if this plan passed and the economy remains the same (which it will if Republicans want to cut taxes AND cut spending, and they won't pass a stimulus bill), then by reducing government spending by 2% of GDP in 2012 would bring economic growth down to zero, is that right?

What would that reduction in GDP do to unemployment then?

And so then by 2013, there'd be a recession unless the economy picks up, right.

I didn't see anything about whether they made assumptions about the rate of growth of GDP ... like did they in fact consider the possibility that their plan to cut deficits could put the economy into a recession, or did they assume that the future's rosy?

Like did they put forward a contingency?