Deficit Chiefs Unveil Plan, With New Tax Holiday

Alan Simpson and Erskine Bowles formally unveiled their 59-page plan to cut the deficit yesterday, and it’s much the same as the draft proposal floated a few weeks back. The pair, who co-chair President Obama’s deficit reduction commission, want to raise the Social Security retirement age, cut Medicare, Medicaid and defense spending, eliminate a huge swath of common tax breaks, and cut 200,000 government jobs—all while limiting government revenues.

“Deep down, every American knows we face a moment of truth,” the pair write. “We cannot play games or put off hard choices any longer.” The new draft has a few new features, including a proposed payroll tax holiday in 2011 intended to boost employment. The full 18-member deficit commission will vote on the plan Friday. They’re expected to reject it, but it will likely still shape the impending deficit debate, the Wall Street Journal predicts.