Simpson and Bowles are known for their deficit-reduction work. Report: New Simpson-Bowles plan

Erskine Bowles and Alan Simpson, the wise men of Washington whose deficit-reduction plan has become a frequently invoked Washington shibboleth over the past two years, are releasing a new plan Tuesday, hoping to split the difference between President Barack Obama and House Republicans.

The new plan from Bowles, a former chief of staff to Bill Clinton, and Simpson, a former GOP senator from Wyoming, would reduce the deficit by $2.4 trillion over the next decade, according to POLITICO’s Playbook. House Republicans want to cut it by $4 trillion, while the White House has set a $1.5 trillion goal.


( PHOTOS: Bowles, Simpson at Playbook Breakfast)

The Bowles-Simpson plan would cut $600 billion from Medicare and Medicaid (the White House will support only $400 billion), $600 billion in new tax revenue from ending or curbing deductions and breaks (the House GOP has said all revenue is off the table) and $1.2 trillion in cuts to discretionary spending, along with cuts in cost-of-living increases for Social Security, the farm program and civilian and defense retirement programs.

“[W]e call for an additional $2.4 trillion of deficit reduction over the next ten years,” Playbook says. “Roughly one-quarter of those savings should come from health care reforms and another quarter from tax reform. The remaining savings should come from a combination of mandatory spending cuts, stronger discretionary caps, cross-cutting changes such as adopting the chained CPI for inflation-indexed provisions in the budget, and lower interest payments.”

A three-page outline of the plan goes into more detail.

After serving as co-chairs of a presidential deficit-reduction commission, Bowles and Simpson went on the road to shill for their plan, which was embraced by corporate America. The duo also led the Fix the Debt campaign, which unsuccessfully pushed for a so-called grand bargain during negotiations over how to avoid the fiscal cliff.