by and large, keying off of rivlin and domenici, keying off bowles-simpson. they tend to be rough starting points that people agree with. to be candid, i don't think many members of congress have drilled down the details of bowles-simpson and rivlin-domenici. that's part of the exercise here. i'm going to hold hearings on each one, on bowles-simpson and rivlin-domenici. that's an opportunity for senators to better understand what is included in each and better understand the trade-offs that are needed in order to reach a solution. starting say with entitlements. people talk about entitlement reform. well, what is meant by that? let's take medicare. various actions one can take under medicare. senators and the country frankly need to know what the trade-offs are and what each change actually costs or what the consequences are. same thing on the revenue side. i'm a firm -- i firmly believe where there are facts, people tend to focus more on facts and less on rhetoric. i'm trying to get away from the rhetoric and get people to think about the facts. in these hea

we've had some success in that endeavor back when senator domenici were in charge. we need to turn to them for advice now. steve has been central in the new bipartisan policy center report on sequestration. so i'm going to begin with him and work this way and each person will give opening thoughts as i ask a broad question and then we'll go to some discussion and then to you. steve, we just had an excellent presentation from senator ayotte talking about the broad challenges about how the defense department would be affected by possible sequestration scenario. and we all know, sequestration, to review the basic point, would be $500 billion in additional cuts over the next decade on top of the 500 billion that are already happening, on top of additional reductions in war spending which were always intended to be temporary, but none the will, it's worth putting this in context, and i would like to ask you to summarize what you are most concerned about concerning sequestration for better or ill. i don't want to pre-judge the conversation. not everyone here is as adama a

it's important because it looks at the whole budget, just like rivlin/domenici. that's one play and that's key one. i'm glad that if we're going to dust off any plans, it's a plan to look across the federal government and federal spending writ large, but if i'm just breaking down the defense piece, this plan centered around roughly $850 billion in total over a decade of defense spending reductions. now the baselines have changed so all the numbers are different, but you get the rough idea. focus primarily on modernization. f-35, v-22. pick your program. it's probably in there for reduction or cancellation altogether. but there were some ground breaking changes on a bipartisan level to talk about defense entitlements. it's something i know a lot of our colleagues up here and at brookings and around town are thinking about and have looked at. the way you pay those, not today's force. i don't want to go there. it's not the conversation we're going to have about how you pay tomorrow's force. and changes to tri-care, should d.o.d. operate commissaries? should we let t

the past two years our bipartisan debt reduction task force led by senator domenici and dr. alice rivlin have been calling upon congress and the president to come together and enact a comprehensive bipartisan debt reduction plan such as the one developed by the reduction task force that would reduce the debt 50% of gdp by 2020. clearly tax reform is the of the key piece of the debt reduction puzzle in addition to entitlement reform and we're pleased to be joined today by the senate finance committee chairman bachus and this distinguished panel on tax policy. here to introduce senator baucus and senator domenici the former senate budget committee chairman and senior fellow at the bipartisan policy center. [applause] >> i knew it would take a house member to recognize. [applause] i don't know whether he would applaud for pete domenici or not. no reason he shouldn't. [laughter] i just want to say for a long time now we've been talking about our national debt. it's not getting any better. there are some cynics that continue to think that it's not very serious. we've had this pro

domenici was chairman. mr. bill hoagland was made deputy nfl just have to write that language.hat was the first time we had sequester, as far as i know as a legal term in the budget lexicon. i didn't approve of it then. i don't approve of it now. i don't think congress needs a coming down because they can't do its work. we get them and i've been on 11 campaign in addition to doing work on budget. we elect them for a reason. we elect to the and we elect them to get this done. when someone says in this bunch say publicly publicly if united states editor congressman, we can't do this. we need something to force us to do this or to do it for as, then you know something really important has gone wrong. our report is very simple. jim jones used to be nsa direct air. pete domenici, dan glickman who among other things was the chairman of the house intel committee. the white paper says three things. one, fiscal policy. two, defense policy. three, stupid defense policy. understand the nondefense it doesn't change are approaching 100% to 200% of gdp -- debt to gdp ratio except two years.

messina it domenici rivlin, and other plants presented you can pick and choose.ut is there the will? it is the will to make it happen. any artificial deadline is just that. >> >> i huge mistake is to kick everything down the road. of framework of tax reform. there is no reason it can't or should we should not extend those above 250 in return there should be specific entitlement changes certain veins up front than there is a process. what happened by january 1st? and probably not. there is a fiscal cliff but cbo says all tax cuts expire will probably go into a mild recession. you do not pull aggregate demand out the first month. the reason i mention that when the government shut down 1995, the pressure was so intense that in three weeks we have a deal. we could go over the side january 1st the pressure is intense and there is a framework deal that is retroactive january 1st. one final point*. many think you cannot regulate the tax code but what some members came to understand changes of health care almost as complicated you need a number of months so there is a pa

we've seen it in the domenici-rivlin. you're going to see it in other plans that are being presented, presidential candidate romney has one. you can pick and choose. the question is, is there the will to pick and choose. that's what's been lacking. not the stuff, not the substance, not the specifics. it's the will to make it happen. any artificial deadline imposed on creating the will to make it happen is just that. it will be artificial. >> mr. greenstein, something to add? >> two quick points. i want to clarify, certainly what i think should be done and i presume alice will agree with this. i'm not certain. i think it would be a huge mistake, one of the biggest we could make, to just kick everything down the road, even six months. a framework agreement that sets up time to do things like tax reform, health changes and so forth, there is no reason it can't and it should have some provisions up front, namely, in my view, we should in extending tax cuts, not extend those above 250 and in return for that, there should be so

senator domenici, alice rivlin, the simpson/bowles commission, every one of them has said we cannot get our budget in balance without new revenues. in many contrast, republican presidential candidates when offered the choice of $1 of new revenue for $10 of reduced spending said they wouldn't agree to a bipartisan agreement like that. would you? >> ten to one? >> yeah, this will prove i'm not running for anything. let me finish. >> i appreciate your candor. basically we cannot close the budget gap without addressing both spending and revenue as all of those bipartisan commissions have recommended. wouldn't you agree? >> if you could bring to me a majority of people to say that we're going to have $10 of spending cuts for $1 of revenue enhancement, put me in, coach. >> problem is the ten never materializes. mr. langford. >> i've never seen a $10 -- that would be wonderful. let's see it. that would be spectacular. >> thank you. thanks all of you. it is interesting when you talk about targeted tax cuts we seem to go back to the same areas that all the problems in america seem to reside arou

it's important because it looks at the whole budget, just like rivlin/domenici. that's one play and that's key one. i'm glad that if we're going to dust off any plans, it's a plan to look across the federal government and federal spending writ large, but if i'm just breaking down the defense piece, this plan centered around roughly $850 billion in total over a decade of defense spending reductions. now the baselines have changed so all the numbers are different, but you get the rough idea. focus primarily on modernization. f-35, v-22. pick your program. it's probably in there for reduction or cancellation altogether. but there were some ground breaking changes on a bipartisan

the problem as you look at since and-bolts and domenici-rivlin, -- simpson-bowles, mental looked at the long term, health care, social security. the had to broaden the base and lower their rates. that was key in our commission to getting an agreement. how low could you go on the rates that would attract republicans to say that it would be a substantial reduction in rates so that i could bring that to my people and say that we were improving the tax code? so long as we're doing that entitlement reform as well to bring down the long-term spending, the key is filling in the details. we lowered the top rate to 28% and then a 16% rate. we had some raised as to the proposals about how you would broaden the base to do that. all too often, i think that gets lost about how that would happen. we did broaden the base and lower rates, but we used some of it for deficit reduction ending up with their revenue increase which is something that has to happen. when you look ahead, to say that romney is looking at the rye and budget as a model, he has two rates, 25 and 10, that he likes. in order to do th

i just want to pick up, senator domenici is the word quagmire. senator coats used the term stall speed. i have to admit i am concerned about some of the same things. the vice chair of the said yesterday of the dice and economic clout described adverse shocks that could push the economy into territory where it's self reinforcing downward spiral of economic week this could be difficult to arrest. i am not an economist, but that sounds bad. is that right? >> the concern she is expressing is that it produces not sufficiently strong to it wouldn't take too much to put us back into a recession or a significant slowdown. >> so i wanted me went admit to having trouble sleeping every night, but what does bother me as lehman brothers and when i wake up at 3:00 in the morning come and that is what i'm worried about. i don't know what lehman brothers looks like. i don't know whether it's in this country or perhaps in europe, but i think she summed it up pretty well and this is reported on the cnbc's squawk box this morning. when they played that clip it got

what we did on rivlin-domenici, we had a big up front stimulus package which wasn't just a payroll taxs. and maybe that's not the right approach. me their other coaches, but we wanted to emphasize that you could and should be accommodating in the short term, but so long as you are having a longer-term sustainability plan. >> doug, please go ahead spent i just want to say, i think this is a big point of contrast, which is this temporary targeted policymaking approach is not one that the government romney supports. we've had an economy growing since 2009. june 2000. is going to slowly. so the fundamental problems are not ones that will be treated by the. you need to enhance the trend rate of growth in the economy that requires tools of permanent reforms, structural problems. that will help in the near term. i think they go hand-in-hand. >> what this ignores is the mystical job creation record of the last administration. if we look at the period the end of the recession, the 2001 recession to the current period to the current period, and compare that with the comparable period after the 2

he talked about the minute she -- domenici. >> i would interpret it as to stay open but i'm not ready to come forward with my details yet." >> i thought of this. it jogged my thinking. here is the long shot that i know is that going to happen. but i think it is the right thing to do. if we can get agreement -- as we can as of now -- that we need revenue, that it would be great if it was somehow the tax reform process that would somehow find a way to get some kind of tax into this mix. you can use part of it for deficit reduction. you could use part of it to offset higher energy prices. you could use part of it to lower the corporate income-tax rate. i am one who is increasingly nervous about what is going to happen worldwide with our inability to deal with climate change. is even more serious than our inability to deal with fiscal issues. the fact that we do need some revenue year may be an opening for some kind of bipartisan agreement. >> one last question. a question over here? >> lloyd hand, king and spaulding. thank you up for making this subject more accessible. there have been i

here to introduce senator baucus is senator domenici, with the policy center. [applause] >> i knew it would take a house member to recognize that. [laughter] i do not know if he would applaud forepeak or not. there is no reason why he should not. i want to sit for a long time now, we have been talking about our national debt. it has not been getting any better. there are some cynics around you do not think it is very serious. we have had this problem before, do not worry. i am not one of those. i do not think we have had this problem before. it was regardless of what we had to spend, because we had to win. it took us three or four years to bring it back in balance. nobody seems to have that goal right now to see that that is done, but in trying to educate the public as best we can, with a president who does not seem to want to educate the public on this issue, we try hard, but we are making the point, and many others are making the point, that the debt is too big, and it may be in some profound way affecting our life, now and in the future. in the promoting of

and i agree with former senator pete domenici and former o.m.b. director alice rivlin who appeared before the finance committee earlier this week and who both agreed we need a short-term extension of current tax law in order to get us to a place where we can consider fundamental reforms to our tax code and our entitlement programs. madam president, even former president bill clinton, a major surrogate for the obama campaign, admitted the obvious when he said resently that a short term extension of the tax cuts might be necessary. former president clinton and other democratic members that i mentioned have not suddenly become supply-side tax cutters, but they realize that it is simply common sense that with the economy slowing, the last thing that congress should do is slam on the brakes by allowing massive tax increases. we were reminded earlier this week just how destructive the proposed income tax rate increases would be on the sector of our economy responsible for the bulk of new job creation, and that's our small businesses. according to an ana