An interesting exchanged occurred during a Bloomberg Government forum today, "State of the Union: What's Next?," when moderator Al Hunt asked if the Simpson-Bowles deficit reduction plan were to go now to Congress for a vote. Sens. Mark Warner (D-VA) and Bob Corker (R-TN) responded, yes, it would.

The morning panel, "Economic and Business Implications," also featured Business Roundtable President John Engler and Alice Rivlin, senior fellow at the Brookings Institution and former CBO and OMB Director.

Al Hunt, Bloomberg News executive editor, referring to the report of the National Commission on Fiscal Responsibility and Reform, asked, "If Simpson-Bowles came to the Senate floor tomorrow, up or down vote, what would happen?" Created by President Obama, the commission issued a report in December 2010, which failed to win the margin needed for adoption, with 11 of 18 votes in favor; 14 were needed.

Corker called the failure of the commission a missed opportunity, while explaining that its relative popularity resulted from its lack of specifics. Hunt pressed him: Would it pass? Corker responded, "There were lot of details that were left out of Simpson-Bowles, but I would say, generally speaking, drafted the way that I would interpret it, I think it would pass. I think it would pass overwhelmingly."

Warner followed, commenting, "I think it would pass, too. We’re at 45 Senators now in our [bipartisan deficit reduction] effort during the fall, 100 House members. It’s not perfect, but as Bob said, it lays out a framework. As one member of the House said – whom we didn’t expect to get – she said, you couldn’t not vote for it, because we would finally be laid out with a real grand bargain: Entitlement reform that would make Medicare, Social Security sustainable…tax reform that would take the growth frame of lowering rates while at the same time generating revenue. And I would find it very interesting to see who would vote against it. What we’ve got to do is to see if we can force that event to happen."

What would be the impact on business confidence, Hunt asked Engler.

"It would be tremendous. I think it would be the congressional equivalent of 'too big to fail,'" BRT's Engler responded. "Simpson-Bowles was very big, and I do think … it would be enormously importance for business confidence. Why that matters is there is $2 trillion sitting on the sidelines."

Rivlin, who had been a member of the deficit-reduction group, concurred: "I think it would be enormously positive. The last missed opportunity was the Joint Select Committee, the so-called Supercommittee, which could have taken Simpson-Bowles, Domenici-Rivlin, Gang of Six, anything they wanted and put it into the Congress for a vote, up or down, and the real question is, would it have passed? I think it would have. And I think it would have enormously reassured not just the  business community but the international investor community and everybody else, that our government was functioning."

 

 

 

 

 

 

 

 

 

 

From left, Business Roundtable President John Engler, Sen. Bob Corker (R-TN), and Al Hunt, executive editor, Bloomberg News. Photo courtesy Bloomberg Government.