Cooper and LaTourette Introduce Bipartisan Budget Resolution

In addition to the House Republican budget, a number of other budget resolutions have come out within the past few days (we will be writing about them, too). However, one budget distinguishes itself from the others: the alternative proposed by Reps. Jim Cooper (D-TN) and Steven LaTourette (R-OH). Why? It's the only budget that has been proposed on a bipartisan basis, and as we said earlier today, it is encouraging to see lawmakers from both parties working together on this issue.

The plan builds off the Simpson-Bowles framework, proposing more than $4 trillion in savings from 2013-2022 and reducing debt as a percent of GDP to 68 percent by 2022. On the discretionary side, the proposal includes more than $600 billion of savings from putting in place stricter discretionary caps than called for in the Budget Control Act. Importantly, the proposal would replace the blunt savings scheduled to go off from the sequester with smart reforms throughout the budget.

The proposal would permanently extended the doc fix by freezing physician payments and more than fully pay for those costs with reconciliation instructions for committees to save just under $600 billion from health care programs. In addition, the resolution would put all health care spending in a budget and limit its growth to GDP+1 percent. The budget also calls for bipartisan Social Security reform along the lines of what was proposed in the Fiscal Commission plan, for total savings of about $230 billion within the ten-year window.

Cooper-LaTourette also includes reconciliation instructions to committees to reduce other mandatory spending. Specifically, they call for changes to agriculture programs, federal employee retirement, the Postal Service, the PBGC, and student loans. These savings would total about $300 billion. In addition, the budget would move all transportation programs to the mandatory side of the budget and limit surface transportation funding to revenues received through the gas tax.

Finally, there is $1.2 trillion of new revenues from comprehensive tax reform that broadens the base and lowers tax rates. In addition, the proposal would generate new revenues (and cut spending) by switching to the more accurate chained CPI for all inflation indexed parameters of the tax code and spending programs.

Congressmen Cooper and LaTourette deserve much praise for putting out a budget resolution that isn't simply a wish list of policies, but seeks to find the middle ground. We have plenty of fiscal plans already that have been proposed to reduce the deficit, but the true measure of a successful fiscal plan going forward is one that reduces the deficit but also has a chance at generating bipartisan support.