page_title: National Commission on Fiscal Responsibility and Reform
section_title: Chairmen's draft proposal
hierarchical_section_title: National Commission on Fiscal Responsibility and Reform / Chairmen's draft proposal
caption_attribution_description: English: Projections by National Commission on Fiscal Responsibility and Reform Understanding the Chart The chart is from page 10 of the final report of the National Commission on Fiscal Responsibility and Reform, which was issued in December 2010. The following is the chart caption in the report: "The Extended-Baseline Scenario generally assumes continuation of current law. The Alternative Fiscal Scenario incorporates several changes to current law considered likely to happen, including the renewal of the 2001/2003 tax cuts on income below $250,000 per year, continued Alternative Minimum Tax (AMT) patches, the continuation of the estate tax at 2009 levels, and continued Medicare “Doc Fixes.” The Alternative Fiscal Scenario also assumes discretionary spending grows with Gross Domestic Product (GDP) rather than to inflation over the next decade, that revenue does not increase as a percent of GDP after 2020, and that certain cost-reducing measures in the health reform legislation are unsuccessful in slowing cost growth after 2020."[1] These scenarios are discussed in further detail in the Commissions Report and the CBO's periodic Long Term Budget Outlook reports. Bear in mind also that this chart represents the public debt, which excludes the intragovernmental debt.
context_page_description: The National Commission on Fiscal Responsibility and Reform was a bipartisan Presidential Commission on deficit reduction, created in 2010 by President Barack Obama to identify "policies to improve the fiscal situation in the medium term and to achieve fiscal sustainability over the long run". The 18-member Commission consisting of 12 members of Congress and six private citizens, first met on April 27, 2010. A report was released on December 1, 2010, recommending a combination of spending cuts and tax increases.
  The Commission's recommendations were politically controversial. Under the executive order that created the commission, a supermajority of 14 of the 18 commissioners had to agree to a recommendation before it was sent to Congress for a vote. In a vote in December 2010, the commission fell short of that requirement, with only 11 out of the 18 commissioners voting to endorse the commission's blueprint.
  Proponents of the plan praised it for hitting all parts of the federal budget and for putting the national debt on a stable and then downward path.
context_section_description: On November 10, co-chairs Simpson and Bowles released a draft proposal for consideration by other commission members providing the basis for the final report to be released later. The co-chairs proposal reduced the deficit by $4 trillion, reformed Social Security and the tax code and included health-care savings and an illustrative savings of $200 billion of discretionary cuts.
  After the chairmen's briefing to the commission members, two Democratic Party members, Senator Durbin and Representative Schakowsky, publicly criticized the plan. Senator Kent Conrad (D-ND), however, declined to criticize the proposal, saying "[i]nstead of shooting this down propose an alternative. But one that does as good a job as this one does in getting us back on a sound fiscal course."  Senator Judd Gregg, the senior Republican on the Senate Budget Committee, noted that the report was a "starting point" which shows the size of the problem.
  The proposal was dismissed as "unserious" by New York Times columnist Paul Krugman for its large cuts in income tax rates. Krugman dismissed the idea that current marginal rates are a drag on economic growth. Further, he doubted that proposed combination of rate cuts and removal of deductions and loopholes will be revenue neutral, let alone increase revenue.
  Union leaders such as Richard Trumka and several Democrats Representative Raul Grijalva rejected the plan saying it cut spending, especially on Social Security, too much. The Economic Policy Institute calculated that the proposed spending cuts would reduce payroll employment by roughly 1.9 million jobs by 2014, and that the resulting loss in the government's tax revenues would cut the proposal's deficit-reducing effect in half. The institute called instead for "budgeting for more desperately needed fiscal stimulus in the near-term...." The chairmen's proposal was also criticized by conservative interest groups such as defense contractors, for cutting spending on defense, and Americans for Tax Reform, a group opposed to both increases in marginal rates and overall Federal revenue.
  The proposal was better received by the Democrat-affiliated think tank Third Way, the Progressive Policy Institute, Representative Jim Cooper (D-Tenn.), Senator Ron Wyden (D-Oregon) and Harvard economist Greg Mankiw. Senator-elect Rand Paul (R-KY), a Tea Party supporter, stated that the proposed changes to entitlement spending should take effect sooner instead of in future decades but praised the proposal for also having "some good ideas". The Concord Coalition, a non-profit and non-partisan anti-deficit activist group, applauded the report and labeled it a "promising start."
caption: Report of the National Commission on Fiscal Responsibility and Reform-Public Debt as % GDP Under Various Scenarios
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