Can This Budget Plan Lead to Congressional Compromise?

Sequestration is looming, and President Barack Obama has once again urged Congress to find an alternative to the $85 billion in government spending cuts, now scheduled to take effect on March 1 because the fiscal cliff compromise pushed back the deadline.

Deficit hawks Alan Simpson, a former Republican Senator from Wyoming, and Democratic Senator Erskine Bowles of North Carolina, have a solution. On Tuesday, the two men announced a plan aimed at creating a path to compromise for Republicans and the White House. It will reduce the federal government’s deficit spending by $2.4 trillion over a period of 10 years through a combination of spending cuts, a healthcare overhaul, and tax reform.

The $2.4 trillion Simpson-Bowles proposal is based on $600 billion worth of spending cuts resulting from changes to health-care programs such as Medicare and Medicaid, another $600 billion in deficit-reduction from curbing or ending a number of tax breaks, and the final $1.2 trillion from lower caps on discretionary spending…