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tonight, erskine bowles and alan simpson, co-chairs of the president's bipartisan deficit reduction commission lay out what has to be done to reduce the deficit. >> if you just rely on deficit reduction through cutting and you want to exclude social security, medicare and defense and of course interest, then you'd have to cut everything else by about 60% to 65%. you can't do that, either. what we've got to do is some combination. alan and i have come out with a plan that's balanced, that takes four trillion dollars out of the deficit over the next ten years. i think that's the kind of thing we have to do. and if we don't, the markets are going to force us to. >> you wanted to ask me that same question. >> rose: i do. >> and i can tell you exactly how we got here. for if last 75 years, we were sent to washington to bring home the bacon.Ñi and i remember in my second term of the senate i went back, somebody said "you haven't help us out here getting a new dam" or "a new visitor's center." or "a new v.a. hospital." i said "no, i'm not going to sign on for that. we already have one. we have this."

witness the reception of the ideas that erskine bowles and alan simpson floated last week. the left screams that reducing federal spending growth will hurt the poor, the elderly, and working families. the right shrieks that tax increases will kill investment and enterprise. but if we go on borrowing, the difference between the spending the liberals say we can't cut and the taxes the conservatives say we can't raise, we will run out of creditors willing to finance our profligacy. a debt crisis could cause economic devastation for workers and business, young and old, rich and poor. it would be far less risky to cool the exaggerated rhetoric and craft a combination of spending cuts and revenue increases to bring the debt under control. the election is over. it is time to get serious. i'm alice rivlin. >> that is nightly business report for this monday evening, have a great night, you too, susie. >> susie: have a great night, you too, tom, i'm susie gharib. thanks for watching, everyone. we hope tov; "nightly business report" is made possible by: this program was made possible

what erskine bowles and alan simpson have proposed. the full commission has not voted on that yet and they need to. you see that lot of members of the commission are from congress. nearly all of them. senator max baucus, democrat of montana, dave camp, republican of michigan, tom coburn, senator from oklahoma, kent conrad, current chairman of the senate budget committee, dave code, the head of honeywell international, senator crapo, republican of idaho, senator dick durbin, covered majority whip in to the senate, and fudge, former ceo, senator judd gregg, representative jeb hensarling, alice rivlin, at representative paul ryan, presumed to be the new budget chief on the house side, representative jan schakowsky of illinois, representative john spratt, just defeated, and andrew stern, head of the service employees international union. those are the members of the commission who will have to vote on what senator simpson and erskine bowles have proposed. richard in new york city on the independent line. caller: there is a simple answer fo

i would like to applaud alan simpson and erskine bowles. i thk americans, if you listen to this last election, the message was stop the spending, do things differently. we're worried about our children and our grandchildren and we can't keep on going like we are. and so maybe the environment has changed enough that americans will respect us making some tough decisis. >> just about a minute left. president bush's memoir is out, "decision points." he talks about you in a couple of places and he talks about your decision not have him campaign with you. and he writes this -- "i thought it looked defensive for john to distance himself from me. i was confident i could have helped him me the case." any regrets that you kept him on the sidelines? >> no, it was a decision made at the time of the campaign. i respect and admire president bush. at the time, it was just the realities of the political situation, as you know. president obama at the time was doing everything he could to tie me to president bush. i admire and respect, and i believe i called

and alan simpson, have put out a 50 page proposal that goes far beyond any previous budget cuts. and with removing all text deductions, interest on mortgages over fog hundred thousand dollars call locals taxes, estate taxes, and most charitable donations. and tax rates would be reduced with three basic rates, 15, 25, 35 percent. this proposal would slash $100 billion from the pentagon. and cut the federal pickerel by 10 percent, raise the gas tax by 505 per gallon, and the minimum age for social security to 69 years old. >> in the extended forecast, and temperatures are going to stay on the mild side. warming up this weekend, until 70. we will talk all about that, coming up. >> and a live look, from sky four in oakland, derrik jones had been issue shot by oakland police, and he was on the armed. they're marching in protest of the witch of bart station in remembrance of oscar grant. all the way to the bart station my mercury moment happened at the beginning of the 3rd quarter. joey came over to watch the game when the storm rolled in. in through the ceiling. i switched to mercury

the chairman, former senator alan simpson, and former clinton chief of staff, erskine bowles, called today's draft a starting point for discussion. simpson joking that he and bowles have ticked off just about everybody with skin in this game, which is everyone, because if they get their way, you won't have any skin left. >> so we present this only as a guide and a directive of where we could or should go, and erskine and i have been told where to go many times during this exercise. i can tell you how many times i've been told exactly where to go. >> one more time, coming up shortly. bowles, following with a considerably more somber preface to their plan. >> we're on the most predictable path towards an economic crisis that i can imagine. the path we're on today is not sustainable, and i don't know a soul on this commission or anywhere else in the congress that believes it is. the arithmetic is compelling. this debt is like a cancer that will truly destroy this country from within if we don't fix it. and we can't grow ourselves out of this problem. we could have double-digit growth fo

alan simpson and erskine bowles are taking on the impossible. >> the democrat and republican co chairman of president obama's panel to solve america's debt problem now respond. >> this is debt is like a cancer that will truly destroy this country. >> it is the co chairman's draft. it is not the commission's draft. >> it calls for $200 billion in domestic and defense spending cuts. >> the first report from the chairman draws blood from both sides. >> nobody i think likes everything in it or dislikes everything in it. >> that they would eliminate all deductions, individual rates would reset to a new low. >> it would eliminate some tax breaks. >> and on spending, cuts to everything. >> to save over $3.8 trillion over the next ten years. >> on the table both domestic and defense spending. farm subsidies to foreign aide. it's comprehensive tax reform. >> including social security. >> proposal to raise the retirement age. >> the purpose is for them to chew on this. >> the tough debate begins. >> there are two nonstarters for me, and that is social security and medicare cuts. >> conservatives a

i would like to applaud alan simpson and erskine bowles. i think americans, if you listen to this last election, the message was stop the spending, do things differently. we're worried about our children and our grandchildren and we can't keep on going like we are. and so maybe the environment has changed enough that americans will respect us making some tough decisions. >> just about a minute left. president bush's memoir is out, "decision points." he talks about you in a couple of places and he talks about your decision not have him campaign with you. and he writes this -- "i thought it looked defensive for john to distance himself from me. i was confident i could have helped him make the case." any regrets that you kept him on the sidelines? >> no, it was a decision made at the time of the campaign. i respect and admire president bush. at the time, it was just the realities of the political situation, as you know. president obama at the time was doing everything he could to tie me to president bush. i admire and respect, and i believe i

alan simpson said people are giving him a more welcoming digit.about the response to what you and your colleagues propose? >> i think the major contribution of an independent effort like this one, this bipartisan policy center, is that it says, although this is difficult, is it possible. so many people are throwing their hands up in despair and saying, my god, this is armageddon, this is impossible. what this says is, very hard to do, but it lays out a road map, says this is doable. hard medicine, tough things to do. but if we could get there, we could solve what otherwise is a very, very difficult situation for the country. the very first meeting of this panel, they told us, today we're at about 62% gdp to debt ratio. the highest or the average we've been in the post-war years since world war ii is about 36% or so. >> so more than double. >> more than double. the highest we ever were was 80% during world war ii for a couple of years. however, here's the bad news, by 2025 on the present trajectory, we get to 100%. >> mostly health and retirement c

when co-chairs of president obama's bipartisan deficit commission erskine bowles and alan simpson released their report last week it was met with howls from the left and right some conservatives claiming it promotes a one trillion dollar tax increase. paul ryan of wisconsin is a member of that commission. i spoke with him earlier and asked what those conservative critics are missing? >> they are missing that erskine bowles a democrat appointee by president obama, former clinton chief of staff is saying we need lower tax rates. we need to lower tax rates on corporations lower tack rates on individuals if we want economic growth and international competitiveness. yes there's part of this that i would change clearly. i would have taken that extra trillion into lowering tack rates and cap tail gains dividends that's -- capital gains dividends. what we have is centrist consensus among democrats we should not be playing class warfare, we should not raise rates, lower rates for economic growth and prosperity that's a cool thing i think. >> paul: one of the proposals they reduced the top rate to 2

here's former senator alan simpson co-chair of the president's debt commission this morning with joegh. >> anybody that says if you get i received ear markses and waste fraud and abuse and all foreign aid will get you there that will give you 5%. so just babble at them the next time. don't listen to anybody giving you that. you have to go with the meat is and the meat is health care, medicare, medicaid, social security, not balancing the books on the backs of poor old staggering seniors to make the damn thing solvent. >> if the recommendation of erskine bowles and alan simpson were to come before you to vote ocongressman meeks, could you vote yea on that. >> on i can't vote on everything but in's parts of it but fact of the matter is along with my staff we're going through it now and trying to see what i could vote because there's some -- some items that we have to take serious with reference to reducing the deficit. but we've got make sure that we're not doing that on the back of seniors, we're not doing that that's going to be you know damaging to one segment. and that's why i'm sa

democrat erskine bowles and alan simpson say their wide-ranging ideas would reduce the projected deficit by nearly $4 trillion by the year 2020. the contentious package touches nearly every aspect of government including cutting all areas of discretionary spending including defense, raising new social security retirement age to 68 by 2050 and rewriting the tax code while eliminating all tax deductions. in addition, the proposal would impose a three-year pay freeze for most federal employees, cut 10% of the federal workforce, eliminate all earmarks and increase the gas tax by 15 cents a gallon. on capitol hill, the reaction to the unpopular proposals was mixed with many suggesting that any final plan would be much weaker than the one released yesterday. this isn't the full plan. these are the preliminary findings of bowles and simpson. outgoing speaker nancy pelosi said this proposal is simply unacceptable. any final proposal must do what is right for our seniors who are counting on the bedrock promises of social security and medicare. afl-cio president says the chairman of the deficit co

one would be tempted to think that the recent deficit reduction proposal from erskine bowles and alan simpson offers a good marker for debate. it does. we are in a difficult situation in large part because we have designed entitlements for a welfare state we cannot afford. and we have used the tax code as a vehicle for special-purpose spending that weakens both the efficiency and fairness of our tax system. the nation's economic and fiscal challenges require a refocusing of economic activity-- less reliance on current consumption and more on investment and exports. accomplishing that shift requires a tax code that enhances incentives for saving and for investment in productive capital. with only a few flaws, the plan does that. the proposal takes a bold step: significantly reduce marginal tax rates for households. this cut in rates-- with salutary effects for work, saving, and investment-- are made possible by limiting deductions and taxing currently excluded employer-provided health care subsidies. the proposal would cut the high u.s. corporate income tax, a tax that holds back both investme

but alan simpson came up to a plan to reduce the budget is not a shock to anyone. >> sounds like it's a good starting point for revolution. what did z. he expect to have happen? >> i don't understand either. one thing for sure is we know for example, we know certain things about the deficit. two-thirds of the deficit are in the wars and big bush tax cut. how are we going to deal with that latter thing? i think we should extend the tax cut for the middle class. the problem we have here is no one seems to be standing up for the fundamental democratic principals. >> be sure to watch "countdown with keith olbermann" at 8:00 eastern. tonight at 9:00 eastern, don't miss rachael maddow's interview with john stewart. >>> the passengers whose dream cruise ship vacation turned into a nightmare are inching closer to land as tug boats pull the disabled ship toward port. all they can do is wait and eat the pop tarts and spam that's been flown in for them. >> reporter: the carnival splendor, under tow and heading home to southern california. >> our focus has been totally centered on the safety of t

captioning sponsored by rose communications >> rose: erskine bowles and alan simpson are with me in washington this evening. they are the co-chairs of president obama's bipartisan deficit reduction commission. last week, they offered a sweeping plan to cut more than $3.8 trillion over the next decade. their plan includes an increased retirement age for social security, the elimination of popular tax breaks, and cuts for medicare and defense spending. 14 of the commission's 18 members must agree to a final plan by december 1 to earn a vote in congress. negotiating a consensus will not be easy, but the proposal has been credited with starting a serious conversation about one of the greatest challenges facing the country today-- the budget shortfalls in 2009 and 2010 were the highest in terms of the total economy since 1945 when the country was at war. the co-chairmen are respected on both sides of the aisle. erskine bowles helped negotiate the last major bipartisan agreement in 1997. alan simpson certain served as wyoming senator from 1979 to 1997, rising to the post of republican whip. i am ple

in fact, there's been much debate about the proposal released last week by erskine bowles and alan simpson the co-chairman of the bipartisan deficit commission. they have been credited for starting a serious national conversation about the chall eck. they've also been criticized by some on the left for overlooking the interest of the middle and working class. joining me now, two people who have argued that view from chicago congresswoman jan schakowsky, she say member of the commission. she released her own plan this week that favors deep cuts at the pentagon and higher taxes on corporations and the wealthy. from washington dean baker, codirector of the senator for economic and policy research. he has argued the co-chair should be complaining that the deficit is too small rather than too large given the economic crisis. after having bouls and simpson on our program, i'm pleased to have baker and congresswoman schakowsky here to talk bay different look at where we are and where we ought to go. i begin with you because we took note of what you had said in your proposal. tell me what you thin

in other words, on the deficit, come december 1 and there's a report by alan simpson and erskine bowles and they've got a vote, they've got to have 14 that will agree on some kind of recommendation, would it be wise and is this a point of departure for the president to say "i'm serious about the debt and i'm going to endorse this program and i'll push it forward, make it part of what i hope to accomplish in terms of setting us on a path of reduce this overwhelming long-term debt we have and the entitlements and the medicare expenses that are part of it." al? >> charlie, first, i don't think they'll get 14 votes for anything significant. 14 votes to end waste, fraud, and abuse. everybody's for that but let john pick up on this. i don't think you're going to get a bipartisan report that says here's big-ticket items that we can cut the long-term deficit. so what i think they'll offer is a menu. i'm sure obama will try to pick and choose parts of that menu but i don't think that makes for a consensus. >> rose: frank? >> all the polls consistently show that the deficit, while a high priority