sustainable. it stabilizes gross debt by 2015, and then lowers it to 93% of gdp by 2022, putting debt on a clearly downward trajectory. it reduces overall spending to 21.9% of gdp by 2022, and it reduces discretionary spending to an historic low of 4.8% of gdp by 2022. it builds on health reform with additional health savings, and it fully offsets the doc fix preventing a dramatic drop in payments to doctors who treat medicare patients. it calls for social security reform that ensures the 75-year solvency of social security, and it calls for social security savings to be used only to extend the program's solvency, not for deficit reduction.

finally, it includes fundamental tax reform, tax reform that will make the tax code simpler, fairer and more efficient while raising revenue. here is the deficit trajectory under the plan. as i noted, it brings the deficit down to 1.4% of gdp by the end of the decade, well below the 3% level, which is this line which most economists say ask critically important to do. over the ten years of the plan, spending averages 21.8% of gdp which is below the level we experienced during the reagan administration. let me say that again. over the ten years of the plan, spending averages 21.8% of gdp which is below the level we experienced during the reagan administration. it brings discretionary

spending, those funds appropriated by congress each year, down from 8.4% of gdp in 2012 to an historic low of 4.8% by 2022. like the original fiscal commission plan, it does not reopen the health care reform debate. instead, it builds on health reform by providing additional health savings. it provides an option to phase out the tax exclusion for health care, a step the congressional budget office said would be one of the most significant steps we could take to bend the cost curve on health care spending. as i noted, it fully offsets the doc fix. to offset these costs it includes savings proposals such as medicare beneficiary cost-sharing, reforming payments to health care providers, eliminating state gaming of the medicaid tax, and extending the medicaid drug rebate to dual

eligibles in medicare part "d." while the fiscal commission budget plan calls for the same social security reforms as the original fiscal commission plan, it does not include in its numbers the savings from those social security proposals. that is because the congressional budget act of 1974, the law that established the budget process, prohibits the inclusion of social security in the deficit totals of a budget resolution, so social security reforms will have to be considered separately. however, the fiscal commission budget plan description does include a policy statement that supports the original fiscal commission recommendations regarding social security. it states, it is the policy of this resolution that congress should work on a bipartisan basis to make social security sustainable over 75 years. legislation shall include the

following proposals. one, move to a more progressive benefit formula. two, provide an enhanced minimum benefit for low-wage workers. three, enhance benefits for the elderly and the longtime disabled. four, increase the early and full retirement age based on longevity. five, provide flexibility for retirees to claim a portion of their benefit at age 62 and the remainder at their full retirement age and add a hardship exemption. six, gradually restore the taxable minimum -- taxable maximum to cover 90% of wages by 2050. next, adopt chained cpi for social security, other benefit programs and taxes. next, cover newly hired state and local workers after 2022. next, direct the social security

administration to better inform future beneficiaries on future options and, finally, to begin a broad dialogue on the importance of personal savings. the fiscal commission budget plan also includes the kind of fundamental tax reform that needs to be adopted. it eliminates or scales back tax expenditures and lowers tax rates. it promotes economic growth and improves america's global competitiveness. it makes the tax code more progressive. specifically, the commission's report included an illustrative tax reform plan that demonstrates how eliminating or scaling back tax expenditures can simplify the code while lowering rates. instead of six brackets for individuals, it includes just three of 12, 22 and 28%. the corporate rate would be reduced from 35% to 28%.

capital gains and dividends would be taxed as ordinary income, although a differential could be maintained if it were offset with a higher top rate. the mortgage interest and charitable dekuxs would be reformed better targeting the tax benefits. the child tax credit and earned income tax credit would be preserved to help working family, and the alternative minimum tax would be repealed. overall, the fiscal commission budget plan would increase revenue to 20.5% of gdp by 2022. over the ten years of the plan, the revenue under the plan would average 19.7% of gdp, roughly the same level seen during the clinton administration, and i would remind everyone that when revenue was at that level, we experienced the longest period of uninterrupted growth in america's economic history. with 39 quarters of economic

growth and 24 million jobs created, the best job creation record ever. so that is a plan that i will lay out in the budget committee tomorrow. it is comprehensive. it is balanced. it is fair, and i believe it represents the best blueprint we have from which to build a bipartisan agreement. that said, i absolutely recognize that adjustments will have to be made for this plan to be adopted. as i noted earlier, it's not perfect, and it needs to be further updated to account for changes that have occurred since it was first proposed in 2010. for example, the budget control agreement. that said, i very much hope that this will provide a blueprint for going forward. the adjustments that i've referenced will have to be negotiated on a bipartisan basis, and those negotiations

will take time. i intend to give members of the committee an extended period to evaluate my mark. the initial phase of the markup will end tomorrow. we will have statements, but we will not complete our work tomorrow. there's nothing i would want more than to reach agreement as soon as possible. it could be that outside events such as a crisis overseas will drive us to coming together sooner than we might otherwise do. i hope that's not the case, but certainly that could happen. i would certainly be open to reaching conclusion as soon as possible, but i recognize what many have observed, that it is unlikely that we will reach agreement until after the election. i think that's just reality. if you look at the original simpson/bowles proposal, it was designed to be voted on right

after the 2010 election. it was designed because there was a recognition it was unlikely there would be an agreement right before an election. it may be that democrats and republicans can only come together when we are closer to the circumstance of all the tax cuts expiring and the sequester staring us in the face, so my own sense is we're going to have to give a period here for negotiations and discussions. i think we need to educate. i think we need to hopefully get people focused again on the need for a long-term plan. let me just conclude by saying the fact is we have spending limitations in place for this year and next.

they are contained in the budget control act, so we don't need a budget resolution to deal with next year's spending levels. the appropriators have already been given their assignments with respect to spending levels for next year's budget. that's done. they have already started working based on the spending limits contained in the budget control act, so we have those limitations, spending limitations for this year and next year, and we have the enforcement provisions for this year and next year. that's also contained in the budget control act. we also have ten years of spending caps. usually a budget resolution only has one, and the budget control act was not a resolution. a resolution is a congressional document. it never goes to the president for his signature. the budget control act is a law. what we don't have is the longer term plan, a ten-year plan to

get us back on track. that's what i hope what i am laying down will stimulate discussion around. how do we put together a ten-year plan to get america back on track? that should be what occupies us in the days and weeks ahead. i'm going to stop there, and i'm happy to take questions that people might have. yeah, jonathan. >> what kind of input did you seek or did you get from the democratic leadership, from senator reid, and given the vote in the house on bowles/simpson which only got a handful of votes, how ready is washington for this? >> first of all, i consulted members of the budget committee repeatedly. we had literally dozens of meetings. i have consulted the leadership

of our party repeatedly. i have advised them every step of the way. i've been amused to see some of these reports that somehow something i said caught somebody by surprise. i don't know how that could be since they were advised every step of the way as to what i was doing and the timing in which i was doing it. with that, i don't speak for their reactions to this plan. i don't -- i've had a rule around here for a long time. i don't speak for others. i speak for myself, so i'd urge you to talk to them for their reactions to the specifics here. in terms of the vote in the house, i think it's very instructive. when i was asked for advice on the timing, i said i don't think it's wise to vote when they did because right before an election people are probably not going to be ready to get out of their trenches. it's probably going to take

waiting until after the election. that's why the fiscal commission plan was designed as it was to have a vote of the commission after the 2010 election. so my own feeling is this is the wrong time to vote in the committee. this is the wrong time to vote on the floor. we have budget limits, spending limits put in place for this year and next so we don't need to go to the floor for that purpose or through the committee for that purpose, because we have the budget control act, which, as i've said, is law, but we do need to try to maximize the chance that as we get closer to all the tax cuts expiring and the sequester from being imposed that we're ready to act. that's what i'm trying to stimulate is a discussion and a planning exercise to get ready for what we all know is coming. yeah. yes.

>> when did you decide you'd go this route? was it relatively recently, and secondly, you're going to get a lot of criticism from people who are going to say that you're basically gone back on your promise to hold a markup? what is your reaction to anticipation of that criticism? >> we are going to mark up. i don't know what could be more clear. we are going to mark up tomorrow. i am laying down a mark, so we're going to mark up. your first question? >> when did you decide to do this? >> you know, this was my first inclination. then we went through another exercise for many weeks of going in a different direction, and as we went through it i concluded just putting up another partisan budget plan probably is not going to contribute much, so we changed course and went back to where i originally started. yes. >> why -- why do this markup

now? i mean, republicans have been saying it's been over 1,000 days since the democrats have had a budget in the senate. senator reid saying he's not going to bring it up for a vote. you even said they are not going to reach an agreement until after the election anyway so what's the point? >> that's a very good question, and, you know, the answer may not be obvious. let me just say, after participating in the bowles/simpson commission as a member, the group of six, what becomes very clear is how long it takes to do this work, and we need to start the discussion and the negotiation now if we're going to be ready for what we all know is coming at us at the end of this year, the expiration of all the tax cuts, the imposition of the sequester. it can't wait. those discussions can't wait. those negotiations can't wait. we i don't think will be

prepared to vote before the election, but we do have to do the homework to be prepared for when we get to -- before we get to the end of this year. >> senator conrad? >> this woman is very patient, yeah. >> you have said that this would bring you -- would bring the congress closer to some sort of idea of how to replace the sequester which is one of the purposes of this. how does marking up an overarching budget plan help in that sort of effort, particularly given the deadline to replace that sequester? >> well, part of this plan is to replace the sequester with these other savings, so, again, i can't emphasize strongly enough, and i know this is sort of geeky stuff, but the hard reality is that the amount of time it takes to put together these plans is really daunting.

ask any member of the group of six. ask anybody that served on the fiscal commission. this takes weeks and weeks and months and months of effort, and so that's why i think it's important that we begin. again, we have the spending limitations in place for this year and next, so the typical timetable for budget is just not very relevant. what we don't have is that long-term plan, and that's what we need before we get to the end of this year, and that work needs to begin right away. >> what time frame do you actually see then? do you see putting out a budget resolution after -- do you see the committee actually voting on some budget resolution after the election and then that being the vehicle? take us through the exact process. >> you know, i can imagine a number of different scenarios. you know, we've had budget resolutions approved as late as october. look, my strong preference would be to act sooner rather than

later, but there's got to be a negotiation, and that negotiation's going to take time. we certainly know that, and it's going to be difficult, and it probably will not be concluded until after the election. i mean, if we're just honest with ourselves, that's probably what is most likely to occur. it may not occur then. it may be that, depending on election outcomes, that they decide to kick the can down the road a little longer and deal with this in the first part of next year. i can see any of those things happening. i can also see, and one thing i've said to my colleagues is, another reason we need to be prepared sooner rather than later is there are external events that could change the timetable, and i'm thinking specifically about europe. all of you have followed events there closely. we certainly have. i don't think anybody can predict with precision what happens there, so getting

prepared, doing the homework now makes a lot of sense. yeah? >> mr. chairman, how does this relate to the work ongoing with the gang of six to draft legislation? >> well, they could play a very -- they could play a very constructive role here in helping bring people together and surfacing options. one of the things i've said here, and i hope it's clear, the commission plan needs adjustment because it was acted on in 2010. so we've had other things happen since, so we know there have to be adjustments, and what those adjustments might be requires a lot of work, and a lot of work has been done by the group of six, now the group of eight, but i think we are going to get good ideas from every member. yes? >> just so i'm clear here on the

logistics of the process. you expect tomorrow to have opening statements and to play this down as the mark, but do you expect then to have votes on amendments on thursday? do you expect to have a vote -- >> no. adopted by the committee at the end of the week? >> no. you know, i think the timing would be all wrong. if one is interested in really getting a result, which is my interest. the time is not yet right. nothing could be more clear. you couldn't have a clear message than the house vote. i think i got 38 votes. again, if you look at the way bosn bosn bosn bosn bosn bosn bosn bosnia -- bowles-simpson was set

up, it was set up to have the vote on that commission report right after the 2010 election, and the reason was to maximize the chance to get a result, and that's what i think we've got to try to do here. now, i've also tried to be clear. i don't rule out being able to act more quickly if, for example, there was an external shock, but i think the greater likelihood is that it won't come until after the election, and so we've got a budget. spending limits are in place for this year and next. what we need is this longer term plan, and it's going to require a lot of negotiation, and the negotiation is going to take time. >> in what sense is it a markup though if you're not going to be talking about amendments? he'll introduce this 2013 budget re resolution. jeff sessions is about to hold a briefing on the budget process. this is just about to get under way.

let's get our team in. this afternoon we had hoped and expected we would be marking up the budget that would be introduced by chairman conrad. he had been on the simpson-bowles commission, and the gang of six, and we were interested seeing how he would lay out a plan for the country. did not expect it would meet the requirements i felt were necessary but were interested in the whole process. the opportunity to offer amendments, opportunity to debate the great issues of our country. it's very clear that in recent days, maybe in recent hours, he

came under great pressure from the democratic leadership who just did not want their members to have to vote on any budget. this is a conatis continuation sustained plan to do just that. to avoid voting. if you'll remember, last year there was not a budget produced in committee by the democratic leadership, and when bs were force e bch was for budgets were forced to the floor they voted against every one. president obama's, the ron budget, the toomey budget, voted against all the budgets. not on record favoring a single thing that would change the debt course of america. and so i hoped that we would be able to go forward today with a plan that would offer us an opportunity to participate in the statutorily required process, and i intended to,

again, bring up president obama's budget. maybe congressman ron's budget. senator toomey has prepared to introduce and explain and advocate for his historic budget that would change the debt course of america, and that will all be not done today. so i think senator conrad deserves credit for wanting to do this. he deeply believed that there is a responsibility both in law and in morality that the majority party in the senate should lay out its plan for the future, for good or ill, and explain it to the american people, and fight for it. and if they're not willing to do that, i don't think they are willing to do the things necessary to lead our country in the decades to come. so that's just where we are. i have a great deal of respect for senator conrad. he's been very open with me, and

i'm convinced he intended full toe come forward and actually have a real markup today, and i know -- i think he's disappointed and i'm deeply disappointed that's not possible. who's next? >> well, this marks 1,085 days now without a budget, and it is unfortunate. i agree with what chairman sessions said, or ranking member, soon to be chairman, an chairman conrad. i do think he wanted to do a budget. i think he feels considerationous of the responsibility he has under the law to produce a budget. i think what's really unfortunate is that his leadership lowered the boom at some point and said, no way, no how. and so what this has become now, really, is a dog and pony show without the dog and pony. we're going to go through a charade where we all make statements, but there isn't going to be any consideration of

a budget, no opportunity to amend or offer alternatives, and as a consequence, the american people are going to go yet another year without the senate putting forward a plan that describes how in detail we are going to deal with the big challenges facing this country. we're on a fiscal trek, headed for a train wreck, we know that and nobody wants to make the hard decisions and clearly democrats in charge of the committee and in charge of senate today have no interest whatsoever in dealing with these issues or making hard decisions or moving forward with the budget, and that is a, it's a disaster for the country, and it's really unfortunate for this institution, which has a responsibility to be good stewards of the tax dollars, and to lead this country. and what we're seeing clearly from the leadership of the democratic party right now in the united states senate is an absence of any ideas, any thought about how to move this country forward. so we're going to go through the

charade today and it looks like for the foreseeable future at least, go without a budget. so -- unfortunate. >> let me just add, i don't think that anyone really can dispute the notion that the greatest challenge facing our federal government right now is that we're on a completely unsustainable fiscal path certain to result in a complete debacle and crisis in we don't change the path we're on fairly soon. i'm not sure there's any dispute of that. and yet we have the majority party, the party that has asked to be in control of the entire federal government and, in fact, is in control of the senate, refuses to lay out a vision for where they want to take this country. how they're going to solve this problem. what they intend to do about it. and i share the view that i don't think this is, senator conrad's fault. i think he acknowledges that the party in control has a responsibility to lay out a

vision, a blueprint for where we go from here given the disastrous state that we're in, but his leadership simply refuses to ask their members to commit themselves. i feel so strongly about this, i think this obligation goes beyond being the majority party. i think a member of the minority has an obligation to lay out a vision, if it's not identical to that of the other side. mine certainly not so i put together a budget, and you probably all have copies of this. i'm going to attempt to bring this up in committee today. i suspect i may not be allowed to, but this is exactly what we ought to be doing. arguing about and comparing and contrasting and debating and amending different visions. one small example that i would cite. in the budget that i'm going to propose it show as path by which we reach a balance within the ten-year window that's a customary window for this budget. in fact, in the eighth year it reaching a balance. now, i think it's important to put the federal budget on a path to balance.