–Bipartisan Policy Center Develops Complex Plan To Avert Fiscal Cliff
–BPC Plan Links Approval of Deficit Cut Framework To Deferinig Cliff
–Another Report Confirms Fiscal Cliff Includes $500B in ’13 Tax Hikes

By John Shaw

WASHINGTON (MNI) – A proposal to avert the fiscal cliff by the
Bipartisan Policy Center is gaining fresh visibility with a prominently
placed story in Tuesday’s New York Times suggesting that it’s under
consideration by Senate leaders.

The Bipartisan Policy Center, a think tank, has been floating the
proposal for several weeks. It would give policymakers a way to avoid
plunging off the fiscal cliff.

The BPC plan calls for delaying key fiscal cliff deadlines for six
months by passing a law in the post election session of Congress that
includes a deficit reduction framework with “real cuts in spending and
increases in taxes as a down payment.”

The BPC plan further requires the next Congress to pass a larger
deficit reduction plan in early 2013. If Congress fails to pass that
follow-up plan, a “backstop” would automatically become law that would
secure that deficit cut goals are met.

The BPC proposal does not say if this “backstop” would consist of
automatic spending cuts and tax increases or a specific deficit
reduction plan.

Former Senate Budget Committee Chairman Pete Domenici and former
White House budget director Alice Rivlin developed in 2010 for the
Bipartisan Policy Center a sweeping ten-year $5.9 trillion deficit
reduction plan that includes major tax and entitlement reforms.

Domenici and Rivlin testified in June before the Senate Finance
Committee about a revised version of their plan.

They also urged Congress to pass legislation to avert the fiscal
cliff by setting “in motion a process that would yield a comprehensive
fiscal plan along the lines that our Task Force has recommended and
those of the Simpson-Bowles Commission.”

Senate Budget Committee Chairman Kent Conrad has been working with
other lawmakers on a ten-year deficit reduction plan of about $4
trillion that could be considered after the election as the framework to
avert the fiscal cliff.

At a budget conference Monday, Domenici, Rivlin, and former
Treasury Under Secretary John Taylor all urged Congress and the white
House to find a way to avert the fiscal cliff.

“The fiscal cliff did not come from Outer Space,” Taylor quipped,
noting that the deadlines were created by a law passed by Congress and
signed by the President–and can be amended by a new law.

In a related matter, the Tax Policy Center released a report Monday
that says that if the nation goes over the fiscal cliff taxes would rise
by more than $500 billion in 2013, an average of $3,500 per household.

The report added that middle income households would see an average
tax increase of about $2,000.

** MNI Washington Bureau: (202) 371-2121 **

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