Bowles: ‘We Darn Well Better Cut Spending’

December 10, 2012 - 11:47 AM

Erskine Bowles

Erskine Bowles, co-chairman of the National Commission on Fiscal Responsbility with his co-chair former Sen. Alan Simpson (R.-Wyo.) (AP photo/Alex Brandon)

(CNSNews.com) – Erskine Bowles, who served as chief of staff to President Clinton and as the co-chairman of President Barack Obama’s National Commission on Fiscal Responsibility and Reform, said “we darn well better cut spending, because spending is the biggest part of this problem.”

Both Obama and House Speaker John Boehner (R-Ohio) have offered tax hikes to avert the fiscal cliff. Obama wants to raise tax rates, while Boehner wants to limit deductions. If a deal is not reached, then tax increases and cuts in anticipated spending levels would automatically take effect in 2013.

Bowles and former Wyoming Sen. Alan Simpson, who served as the other co-chairman of Obama's fiscal responsibility commission, were guests on CBS’s “Face the Nation” on Sunday.

Host Bob Schieffer asked, “So, Erskine Bowles, what should they do? What is the next thing that should happen to get this result?”

Bowles said the two sides were playing “Kabuki theater” with offer and counter offer, but said both sides have at least “started to tango now.”

“First of all, most important thing is if we’re going to raise revenue and if we’re going to raise it in any form, then we darn well better cut spending, because spending is the biggest part of this problem, and the biggest part of that problem is the fact that health care is growing at a faster rate than GDP,” Bowles said.

Obama’s plan calls for $1.6 trillion in tax hikes by increasing tax rates on those earning more than $250,000 per year, but his plan includes no spending cuts or entitlement reforms. Boehner’s counter offer raised taxes by $800 billion through limiting deductions and loopholes, but not through rates. The Boehner plan also offered spending cuts.

“Even if you raise the top rates back to the Clinton rates, that only creates about $400 billion over 10 years,” Bowles later said. “That’s $40 billion a year. We have a trillion dollar a year deficit.”

Schieffer asked Simpson, “The New York Times crunched the numbers of the tax increases for the wealthy and determined even if the rates go back up to the Clinton-era rates, it would only give us about a quarter of the needed revenue. So what other things can be done? What other taxes have to be raised or where do you get the money to get us to where we need to be?”

Simpson said deficit and debt reduction could not be solved through one avenue.

“There is no possibility to do this, not a single economist who talked to us in our hearings, said we can’t grow our way out of this thing if we had double-digit growth for 20 years,” Simpson said. “You can’t spend your way out of this baby or you’re going to ruin a very fragile economy and an emerging and helpful nation, and you can’t tax your way out of this baby.”