US plunge off 'fiscal cliff' is likely, say debt gurus Simpson and Bowles (+video)
Former chairs of Obama's debt commission, Alan Simpson (R) and Erskine Bowles (D), said at the Monitor breakfast Wednesday they see just a one-third likelihood that the White House and congressional Republicans will reach a deal by year's end to avert the fiscal cliff.
Fresh from a meeting with President Obama and en route to talk with House Speaker John Boehner, the former co-chairmen of the bipartisan Simpson-Bowles debt commission say it's more likely than not that the United State will fall off the "fiscal cliff" at year's end.Skip to next paragraph
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There's only about a one-third possibility that Congress and the White House will reach a deal to avert some $600 billion in automatic tax hikes and mandatory spending cuts over 10 years – an outcome that would be "devastating to the economy," says Erskine Bowles, the Democratic half of the Simpson-Bowles partnership, speaking to reporters at the Monitor breakfast in Washington on Nov. 28.
There's another one-third possibility that "we'll go over the cliff and people will come to their senses in the first week or so," he adds. A third prospect, that a deal takes even longer, "will lead to chaos," he predicts.
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Mr. Bowles and former Sen. Alan Simpson (R) of Wyoming have stayed engaged with members of Congress, the White House, business and other interest groups, and the public since releasing a report in December 2010 recommending a $4 trillion "balanced" solution to America's debt crisis. That plan included a package of tax hikes, spending cuts, and reforms to save money on big entitlement programs such as Medicare.
A balanced framework remains essential to strike a deal, and the looming fiscal crisis provides a "magic moment" to get it done, says Bowles. "To get something done in this town, you need a crisis – and we've got it," he says. But a bipartisan plan still requires support in both chambers from both Republicans and Democrats.