the committee room to hear remarks -- said the committee room to hear remarks by alan simpson and her erskine bowles, the " chairs -- alan simpson and erskine bowles, the cochairs of the commission. >> it could not be more positive. it is really a great idea. >> for a partisan approach can work, starting with republicans saying that this can work -- >> i think your questions are all wrong. i really do. it is non-partisan. that is the whole point. this was a non-partisan activity. i spent as much time with tom coburn as i did with dick durbin. they worked together. kent conrad and senator gregg worked together. that is what made this, unfortunately, unique, but going forward, these relationships and his trust has been established. this is exactly what we did in 1997. we build up trust, we found common ground, and working with senator lott and speaker gingrich and the president, we got to a bipartisan conclusion and a balanced federal budget. i think this is a first step. >> have they indicated they will use anything from this? >> when i was driving here, jack lew, the new budget director paul may --

somebody better call the bowles- simpson team back to washington. we're going to need them again.listen, we need more short-term stimulus, but this was more like a drunken, debt-financed bonanza. and by not combining any short- term stimulus with a budget fix, we failed to enact the model of spend now, save later that is watching washington last week was like watching a junkie promising this hit will be the last. let's just hope our creditors don't stage an intervention before we can get this borrowing addiction under control. i'm maya macguineas. >> susie: and finally, will it be elementary for watson? that's what fans of the game show "jeopardy" will find out when two of its best players compete against an ibm supercomputer. the name "watson" comes from ibm founder thomas watson. the computer will answer questions by sifting through a database compiled by more than 20 ibm scientists. tom, ibm hopes this technology will have practical uses, like solving customer problems at tech support centers. >> susie: that's "nightly business report" for tuesday, december 14. i'm susie gharib

does the debt commission, the bowles/simpson commission, address your concerns in a satisfactory way? >> the short answer's no despite my respect for what they've done. i think they did themselves a disservice. they haven't yet sold america on the need to do something about the deficit and the debt. if i had been in their shoe, i would have spent several months simply explaining the scale of the problem and why it matters. i would not have rushed to talk about this tax cut or tax increase or this spending cut or what have you. but they've done that. i think what they've done that's good is they've put this issue on the table. i'd be real surprised that they got support from their own commission. i don't know how both of you feel. i for one am fairly pesimistic that we are going to be able to deal seriously with this challenge. >> i hope everybody will read this article you wrote. it explains everything. fairly apocalyptic terms. fairly frightening -- >> we should be frinted. >> where we will be in ten years and how dreadfully that affects not just our life style here but our foreign p

. >> the bowles-simpson recommendations -- alice was involved -- suggested there was $100 billion in possible defense cuts. the big ticket items that they identified, the biggest of all was to reduce procurement by 15%. that would produce a $20 billion annual savings. i do not know whether you have looked at that and what that would mean as opposed to the kinds of more surgical strikes at the chairman you are talking about reduce overseas bases by 1/3, $8.50 billion. bob, you might also address the question of whether we really need all of those force deployments in europe. i could see the argument for korea and japan given exactly what he said, but can we save significant money by drawing driving europe wihtouthout up risk to hide? then there was $9.2 billion in freezing combat military pay at 2011 levels for three years, non-combat military paper. y. let's look at those three specific issues -- reducing overseas bases, cutting procurements in a more draconian way, and freezing noncombat military pay. alice, would you like to elaborate? >> those were illustrations. both the bowles-s

. >> the bowles-simpson recommendations -- alice was involved -- suggested there was $100 billion ints. the big ticket items that they identified, the biggest of all was to reduce procurement by 15%. that would produce a $20 billion annual savings. i do not know whether you have looked at that and what that would mean as opposed to the kinds of more surgical strikes at thehairman you are talking out reduce overseas bases by 1/3, $50 billion. bob, you might also address the question of whether we really need all of those force deployments in europe. i could see the argument for korea an japan given exactly what he said, but can we save significant money by drawing driving europe wihtouthout up risk to hide? then there was $9.2 billion in freezing combat military pay at 2011 levels for three years, non-combat military paper. y. let's look at those three specific issues -- reducing overseas bases, cutting procurements in a more draconian way, and freezing noncombat military pay. alice, would you like to elaborate? >> those were illustratio. both the bowles-simpson group and the other gr

senator alap simpson, erskine bowles, gentlemen -- senator alan simpson, erskine bowles, gentlemen, thank you. >> thank you, judy. >> ifill: now, two takes on the mexican drug war. first, a report on how the drug trade is spreading far north of the u.s. border. "newshour" correspondent tom bearden reports from colorado springs. ( siren ) >> reporter: the violence of the mexican drug wars may seem far away. but the drugs and the dealers that fuel them are close to home. colorado springs is best known as the home of the air force academy and the army's fort carson. but this quiet, mostly conservative city of 400,000 is also a major distribution point for mexican cartels. matthew barden is the agent in charge of the federal drug enforcement administration office in colorado springs. >> this house was the focal point of one of our recent investigations into a large methamphetamine organization. >> reporter: he says mexican drug cartels began exporting large amounts of methamphetamine after law enforcement began cracking down on production in the u.s. five years ago. huge quantities of heroin

david, erskine bowles, i will not ask you any banana jokes to follow up on simpson but erskine bowles also said that the one thing this commission proves or now sets out is an adult conversation about the deficit. do you agree? >> i do agree. i think simpsons must save those up over the years. >> lehrer: he writes them down. >> i do think it has had an porn effect. obviously it is to the going to go in effect any time soon but in a number of ways, it expanded everybody time horizon so people are looking over debt problem over more than just five years. second it has had a huge affect on tax reform debate. they really put serious tax reform, sort of looks a little like 1986. and that debate has spread and i think that could come more quickly than people think, thereis a serious debate inside the white house about trying to do tax reform. there are serious moves inside the congress. so that i think was really given a boost. and then finally the cuts that were suggested are the sort of thing we are going to have to do. and actually a little less than we are going to have to do. so the wh

. >> the bowles-simpson recommendations -- alice was involved -- suggested there was $100 billion in possible defense cuts. the big ticket items that they identified, the biggest of all was to reduce procurement by 15%. that would produce a $20 billion annual savings. i do not know whether you have looked at that and what that would mean as opposed to the kinds of more surgical strikes at the chairman you are talking about reduce overseas bases by 1/3, $8.50 billion. bob, you might also address the question of whether we really need all of those force deployments in europe. i could see the argument for korea and japan given exactly what he said, but can we save significant money by drawing driving europe wihtouthout up risk to hide? then there was $9.2 billion in freezing combat military pay at 2011 levels for three years, non-combat military paper. y. let's look at those three specific issues -- reducing overseas bases, cutting procurements in a more draconian way, and freezing noncombat military pay. alice, would you like to elaborate? >> those were illustrations. both the bowles-s

for example, bowles and simpson put forward a combination of additional revenue in the form of, for example, raising the cap on where the payroll tax applies and then also indexing benefits or indexing the retirement age to life expectancy. there is a variety of changes that are possible here, and a combination of revenue and benefit changes is the most plausible scenario in terms of addressing the deficit in social security. >> and what is possible in terms of addressing the high cost of health care? >> well, there i think what we're going to need is an evolutionary approach where there are all these promising ideas -- the accountable care organizations and bundles and pay for performance. but we need to try them and then have a mechanism for moving the scale immediately when something proves to be promising or proves to be effective. the new legislation actually does create some mechanisms to do that through the innovation center and through the independent payment advisory board in particular. you have institutions that will allow you to try out different approaches and alter medicare po

the bowles-simpson plan asks them to pay more out of their own pockets.come for seniors is $18,000 a year. their planned cuts medicare by $110illi by imposing higher cost sharing requirements. my requires medicare to negotiate with pharmaceutical companies, like the veterans administration does. the cbo estimates at a savings of about $10 billion per year. the plant -- the planned cuts the bloated military budget, which is a good thing. mine does as well. by cutting military health care benefits. these military families are not getting rich serving our country and shld not be the targets of deficit reduction. responding to republican calls for slashing spending, their plan calls for deep cuts in domestic discretionary spending. using the plant -- using the formula, there is a 22% cut in current funding levels in 2020. jeopardize in everything from nutrition and education to medical research and job training. their plan opens a new shoe is loophole to incentivize companies to outsource jobs. by adopting a territorial tax system, a u.s.-based multinational

and you voted for the bowles-simpson debt commission plan that called to end $1 trillion in tax deductions. as a result, you took heat from normally a supporter of yours, grover norquist who is head of the americans for tax reform. he said the democrats snookered you. put up the quote. when he, coburn, puts his fingerprints however fleetingly on trillion-dollar increase, he damages the republican party." senator, how do you plead? >> i please that is the kind of languages that causes us not to solve the problems. i don't care if you're rich or poor or liberal or conservative, if we don't fix the problem everybody will pay the price. the very fact we have $1.1 trillion in tax expenditure every year that directs capital in a way that government says it should be directed rather than the way it should be directed based on markets tells us we have a terrible tax system. we need to reform our tax system and eliminate waste, fraud, abuse and duplication in the federal government. to have that debate and to say that hurts the republican, you know, i'm not in the senate for the republican party. i

we've seen, in the so-called bowles-simpson commission, bipartisan support from both parties for the idea that tax expenditures are expenditures, and that something needs to be done with respect to our tax system. so, i've been very gratified in this, my final six weeks in government, that during the period after the election, you actually see some convergence and some action on a significant range of issues. >> brown: and one last issue. what about the danger of replaying the financial meltdown? here we are two years later. people look and we see that some of the banks are bigger than they were. many of the corporate heads, the c.e.o.s, are still in place. this administration has faced some charges of being too cozy, at times, with wall street. what do you say to people who feel that not enough has been done to prevent a future meltdown? >> well, i think you have to look at each institution. and i think what you'll find is that the capital ratios, the reserve that the institutions have, has been mandated to be far greater than it was coming into the crisis. i think what you'll find

simpson. thank you, erskine bowles. >> thank you. we would not be here without you.is conversation. to alan simpson, who i think in perfectspects was the purpo choice to be a co-chair, because he would say all of the wrong things before he would say all of the right things. [laughter] and to erskine bowles, who i suspect if you were doing the running of the bulls, the bulls would move out of your way before you moved and ran from them. i think in many respects, the president chose two individuals who have the courage of their convictions to come forward. i stayed in my office until the wee hours this morning. unfortunately, i kept my staff with me as well. i was trying to figure out if there was a way that i could get to i guess, because for all of the reasons that i think my friend and colleague dick durbin said that he is a yes, i think it is appropriate for all of us to want to be a yes. i am going to be and no, but i want to make it clear that everything dicks said earlier, the reason there is a yes, because it is important to start the debate and to have a seat

the bowles-simpson plan asks them to pay more out of their own pockets.come for seniors is $18,000 a year. their planned cuts medicare by $110 billion by imposing higher cost sharing requirements. my requires medicare to negotiate with pharmaceutical companies, like the veterans administration does. the cbo estimates at a savings of about $10 billion per year. the plant -- the planned cuts the bloated military budget, which is a good thing. mine does as well. by cutting military health care benefits. these military families are not getting rich serving our country and should not be the targets of deficit reduction. responding to republican calls for slashing spending, their plan calls for deep cuts in domestic discretionary spending. using the plant -- using the formula, there is a 22% cut in current funding levels in 2020. jeopardize in everything from nutrition and education to medical research and job training. their plan opens a new shoe is loophole to incentivize companies to outsource jobs. by adopting a territorial tax system, a u.s.-based multinat

and see how they like this 9,000 page ridiculous tax >> the tax code according to erskine bowles and senator simpson is so porked up, i don't know how many special interests -- they call them earmarks in the tax code special interests came into town and said i need a deduction for something and if you got enough money you got your lobbyist to get in there and put the deduction. the tax code is so loaded with special interests, to be so unjust to the average american trying to pay his taxes unless you are part of a special interest group. >> there's earmarking on the spending side. then the equivalent of earmarking on the tax code. if you the right lobbyist and enough power you get your special deal in the tax code. that has to be reformed as well. all of this has to be cleaned up. it is a mess. what we've got is big government, we big government, big labor and really big business coalescing to the disadvantage of everyday americans. and they get the special break. the poor get a hand-out and everybody else gets their wallet out and we are sick of it. >> greta: it is interesting, you are lucky you ar

>> well, first, let me just say i think that the co-chairman of the commissioner skin bowles and alan simpson have really done yeoman's work with. they've done a greet job. they really highlighted a lot of key issues. and i think this report is going to set much of the debate whether it's voted on or not. but i think there is several concerned i have. and one is that the big driver of spending and deficits is health care spending. and we know that the new health-care bill actually increases the deficit and increases health care spending. so it didn't make it better t made it worse. and this commission report largely has left that whole area untouched. and i think that is one of the areas that is really lacking in this report. but having said that -- >> they have a couple hundred billion dollars in spending reductions in health care and medicare and they have this idea of a global health care budget essential three would cap all federal spending on health care as a percentage of gdp is that where we where headed? would you support something like that. >> what they do is they unfortunately inst

whether to raise your taxes or cut programs that help you, even an 18-member commission, nicknamed simpson bowles, couldn't agree on how to handle the problem. democratic representative jan schakowsky of illinois wants uncle sam to spend his way out of the economic doldrums: >> first of all i don't agree that this is a time for us to be worrying about the deficit because what we need to be doing is actually spending some money to put into people's pockets so that they can go out and buy things. that is a deficit reduction plan. in other words, cutting spending at this time could lead us into a double dip recession, but actually making investments and doing things like extending unemployment insurance means that people can be customers. they can go out and buy things, create demand, which will help grow the economy and then lower the deficit because the economy is growing. >> but her counterparts say tough times mean tough choices and americans will have to give public schools, road building and road repair, unemployment benefits, and so on. another scenario has the average family paying an extra

. >> one of the things that i find so troubling is two weeks ago we had the bowl us simpson report.dy was saying the deficit is the major crisis we face over the next decade. a week and a half later, we've blown another $4 trillion hole in the deficit. what happened over the course of the weekend or two weekends? deficits concerns went nowhere and we add $4 trillion to the deficit? >> deficit concerns are never as much as people around here like to say they are. in my party, social security and medicare, the importance of those two things trump deficit concerns. the republicans party, tax cuts for the rich trump deficit concerns. read into that what you want. that's clearly what happened. in the juxtaposition, the democrats sat around talking about it and tax cuts for people making millions of dollars a year is pretty stark. this will be the excuse to gut the programs that you and i care about and that we will get the raw end of both sides of this bargain, tax cuts for the rich and none of the investment we need. that would be the worst possible outcome. >> that's my biggest fear. t

they know also that it will not be bowles or simpson who will the amount of this pit.t will be your colleagues, your legislative colleagues. only you, no one else, not the president, or joe biden or anyone else. -- no one else can right this ship. you 12 and your successors and 523 colleagues will have to do this herculean task. no one else. do we need to do. do what you must do. guided by your conscience and principles and a shred of patriotism. whichever way you go, share with us in the report in the appendix. tell us where you do not like it and voted no. tell us where you do not like it and voted yes. that is a wonderful alternative. those are the only ways out. those are honest ways. i admire and debt -- respected. you need not explain or comment on your vote, which ever way. we have listened, visited, negotiated, debated, and discussed all these issues for us. i think we have done, all of us have done our level best and then some. i want to render thanks for your energy, your time, and your talent. those same attributes of your fine stuff gonna bless you and i yi

that is why the work of the bowls simpson commission is so important. that is why president obama committed himself to healthcare cost reduction. in the context of the recently enacted health-care legislation. if there ever was an area where president kennedy's doctrine that man's problems were made by man and therefore they can be solved by man, if ever there was an area where that applies it is the budget deficit. the united states improved structural deficit by four percentage points between 1993 and 2,000. being called on to make fiscal adjustments in the range of 10% of gdp. once our temporary fiscal support expires we need an improvement in net 2% to 3% range of gdp to begin the process of putting our debt on a declining path relative to our income. president obama has taken several steps in this direction. a multi-year freeze in spending outside national security, serious effort to root out outdated spending in every area particularly defense and particularly defense. particularly welcome feature of the recent commission report is its bipartisan

. >> thank you very much, chairman bowles, chairman simpson. we would not be here without the inspiration of judd gregg and kent conrad, who patched this idea on a trip. -- hatched this id on a trip. even that good idea could not have been launched without define leadership of you two. i thank you, senator simpson, for knowing this institution of congress from the inside, and thank you, erskine bowles, for amazing amounts of energy and dedication to get to this point. bruce, thank you so much for all you have put into this. i've received a few phone calls in the last 24 hours. [laughter] so my closest allies in politics the -- so many of my closest allies and politics cannot understand this. "why is a progressive like dick durbin of voting for this deficit commission report?" here is why -- i believe politicians on the left and right have to acknowledge the deficit crisis our nation faces. when we borrow 40 cents out of every dollar we spend, whether it is the pentagon or food stamps, that is unsustainable. being ein get it for generations to c

the commission thatter skins bowls and senator simpson head, 75% spending cuts, 25% revenue increase.u'll be increasing the revenue, but at least we're beginning to take steps with the fiscal reality. the president should embrace it. >> sean: the left and right, nobody likes this commission. >> those of us in the center like it a lot. >> sean: mitt romney was on "the tonight show" with jay leno. this is what he had to say. >> a lot of republican candidates have gone to work for fox news. have they approached you as being a correspondent, something of that nature? >> jay, if you ever see me sign up for a big on fox news, it will be a clear indication i've decided to run for president. >> really? wow. >> yeah. that's no the cards anytime soon. >> let's suppose in some crazy idea you were going to run in 2012, what would you do differently than you did in 2008? >> i'm not a political consultant and strategist who can lay out you how you do these thing, but if i were to do it genocide to make sure i got more votes than the other guy. >> sean: all right. who's the top contenders in your mi

so the argument on behalf of them, and i talked to the co-chairs, erskine bowles and alan simpson saying that more than offsets that. >>guest: we don't know. lower rates and simpler rate would spur the economy in a big way. unfortunately, our deficit is so bad that nobody is willing to entertain that without other tax increases somewhere else. i look at it as how big the pie is, the government pie used to be about 20 percent of g.d.p. and now it is nearly 25 percent of g.d.p. and i want to shrink the government pie back down to 20 percent or 18 percent and in doing so expand the private sector and that is where the jobs are created. so i don't want to do anything that increases money that government will get. i would rather accept less benefits, for example, rather than punishing those who make $ 200,000 a year by having them pay more social security taxes up to $200,000, reduce the benefits of those would make a lot of money in retirement and have means debting in order to allow us to have a system that is solvent without racing taxes. >>neil: but isn't that at least on social security,

erskine bowles from north carolina, alan simpson, former senator from ayatollah, chaired it. did a great job. it was inspired by kent conrad, our colleague from north dakota, senator judd gregg of new hampshire. they were the ones who asked for this commission. they went to work for ten months and today we voted on that commission report. i voted "yes." i left that deficit commission to take that short one-minute subway ride over here to the capitol to emerge in the senate chamber and to try to understand how two buildings so close to one another can be so far apamplet because here on the floor of the united states senate, the debate is on whether or not we should extend tax cuts for the wealthiest people in america. doing that will add dramatically to our national debt. just to put it in perspective, senator mitch mcconnell's proposal for tax cuts for the next ten years will cost us $4 trillion. does that number sound familiar? that's the amount of deficit commission was told to eliminate in spending and create in revenue over the next ten years. all of the work of this comm

are simpson and bowles out of town? yeah. let's add another trillion dollars to the debt. >> it's out of control. >> dr. sachs, do you think it was necessary, adds the as the president has argued and others, that we could not allow those tax cuts to expire, something had to be done, as the president said? >> they were delight washington, d.c. this deal, both sides. the president thinks he's got his stimulus, as if we need stimulus of this kind. and the republicans have their eye on one thing. it's not the deficit. it's the tax cuts. so both sides are actually delighted, the white house and the republican leadership. it's only all of us, the rest of us that are wondering what just happened. >> you know, the largest tax increase, mike barnicle, it's a tax increase that we americans haven't seen in a long time, and our politicians and our economists and academics are so arrogant, we believe we're immune to this, it's inflation. you keep spending money like this, at some point inflation explodes and that acts as the biggest

i was very disappointed that the simpson/bowles proposal, which is a step in the right direction, won't the problem, but a major step in the right direction, was not immediately embraced by the administration and the leaders of congress and brought to the floor for passage before we left. that's what should have been done. on the upside, well, i have to be honest. i actually think doing t.a.r.p. was the most significant thing that's happened in the 5 to 10 years. we are on the verge of a cataclysmic event. and if we hadn't stepped forward as a government and done it in a bipartisan way in a short time frame, the trauma this country would have been put through as our banking system melted down and our economy melted down, would have been devastating. now the taxpayers will make money on this deal, it looks like to me. i think the program worked the way it was supposed to. >> let us play just a moment from senator mcconnell, your republican colleague, talking about you on the senate floor yesterday. >> and while senators come and go all the time, i can't help but note that when judd walks

americans for tax reform -- the policy director there -- tweets out this, by agreeing to the simpson/bowlest taxes to get elected. >> what needs to be responded to is i can have my position all day long. how good is that going to do for americans for tax reform or the "wall street journal" if we end up having to run a bond rate on american debt? what good does that do? and so i see the urgency of our position and the crisis that's coming is -- we can't wait for another election to strengthen our position. >> well, you make that point. you just said the interest groups don't need to be responded to. but isn't that part if not a significant part of the problem that people on the left feel beholden to their interest groups and afraid to defy them? people on the right are afraid to defy them? >> well, i obviously am not afraid to defy them. >> you're one vote, though, sir. >> how do you convince enough of your colleagues the country needs to be bigger? we need to take bigger steps even if it ends up we lose our jobs? >> i think what you do, you have to lead by example. look, nobody has stronger

responsibility and reform and particularly the leaders of this group:er kin bowls and -- erskine bowles and alan simpson, great patriots. they've come forward with some recommendations. in their preamble they make it clear none of us likes every element of the plan, but they put forward a plan that i think is a starting point for us. and we intend to use these next few months, frankly, we intend to use the run-up to the vote we will have to take on the debt ceiling around april of 2011 to make real progress. let me subscribe to several of the statements made in the preamble. they say we cannot play games or put off hard choices any longer. i think the american people know that, and they expect leadership from their elected representatives in the house and senate in that regard. the report in the preamble goes on to say the american people are counting on us to put politics aside. that's what we're trying to do on the floor today with a bipartisan representation. pull together and not pull apart and agree on a plan to live within our means and to make america strong for the long haul. it's been pointed o

. >> reporter: erskine bowles and former senator alan simpson offered some revisions to the sweepingllion over the next nine years, and they got support from members of both parties worried about our future. >> we will be the first generation in the history of this country to pass less prosperous and secure nation to our children. >> i am prepared to support this plan. and to support it strongly. because i don't see another alternative. >> only one person said she will vote no. in all, seven commissioners were supportive, even those with reservations that want to keep the plan alive. >> i think it's extremely important we continue the process. >> the problem is real. the solutions are all painful. there is no easy way out. >> such as freezing domestic and defense spending for years and eliminating $1.1 trillion in annual tax deductions, including for mortgage interest, though some could be added back if paid for. some of the savings would be used to lower all tax rates, leaving them between 8 and 23%. simpson emphasizes we cannot keep borrowing so much money. >> no more fun and games