simpson bowlesAP/Alex Brandon
During last week's debate, the most searched-for topic on Google was "Simpson-Bowles".
The search frenzy came after mentions of the plan by both Mitt Romney and Barack Obama.
So what were the candidates talking about?
Below we explain the debt plan that has huge ramifications both for this campaign and the future.

What is it?

Simpson-Bowles is the shorthand name for The National Commission on Fiscal Responsibility and Reform, named after co-chairs Alan Simpson and Erskine Bowles, a former Republican Senator and Clinton Chief of Staff, respectively.
The commission was created in 2010 after President Obama sought to identify medium and long term strategies to cut the national debt. The commission was comprised of eighteen members:
  • The two chairs
  • Twelve congressmen: six House representatives, six Senators, three each from both parties 
  • Four external appointed members: two former CEOs, a former SEIU president and a former Federal Reserve vice-chair.
Here's the Romney connection. Rep. Paul Ryan, the vice presidential nominee, was one of the three Republican representatives on the commission.

What they did

In November of 2010, Simpson and Bowles released a proposal for consideration by the members of the Commission. Here's what they recommended:
  • $200 billion reduction per year in discretionary spending. The highlights of the cuts include a 15% reduction in defense procurement, closing one third of overseas bases, cutting the federal workforce by 10% and eliminating earmarks. 
  • $100 billion in increased tax revenues. Proposed avenues of this tax include a 15 cent per gallon gasoline tax and the cancelation of tax deductions like the home mortgage interest deduction. 
  • Maintain the Obamacare Medicare cost controls and consider the public option for health care reform. 
  • Reduce entitlements like farm subsidies, student loan subsidies, and federal pensions (both military and civilian)
  • Raise the retirement age for Social Security and raise the payroll tax. 
The commission also recommended cutting the corporate tax rate from 35% to 26% to make the plan economically palatable. 
If these talking points sound familiar, it's because they should be. Each of the presidential economic plans pick and choose different aspects of Simpson-Bowles, but neither of them have come out in favor of agreeing to the other party's propositions in the interest of compromise. 
That's why it's unsurprising that the commission failed — when they took a vote, the commission failed to achieve the necessary supermajority to officially endorse the plan. 

Why a lot of people hate it

To it's critics, the plan is shortsighted and is poised to enact irreparable harm to the economy. 
Economist Paul Krugman is probably the foremost critic of the plan. He's called the plan and the people behind it "unserious." From a blog post penned at the end of September:
So, a public service reminder: Simpson-Bowles is terrible. It mucks around with taxes, but is obsessed with lowering marginal rates despite a complete absence of evidence that this is important. It offers nothing on Medicare that isn’t already in the Affordable Care Act.
Krugman criticizes one of the most significant portions of the plan as well, the decision to raise the Social Security retirement age, describing it as classist:
And it raises the Social Security retirement age because life expectancy has risen — completely ignoring the fact that life expectancy has only gone up for the well-off and well-educated, while stagnating or even declining among the people who need the program most. 
 The plan has been criticized by the Aerospace industry as being too hard on defense, economists have said it cost millions of jobs, it's been shredded on the left for being too hard on Social Security, and the Republicans who voted it down criticized it on raising taxes. Essentially, the main critique is that the people who formed it were too obsessed with cutting the government without looking into the economic results of the cuts.

Why it matters

Because the President started it and Ryan served on it, Simpson-Bowles as a potential bipartisan compromise will likely define the remainder of the campaign, at least on national debt issues.
Any candidate who moves closer to the middle-of-the-road position would likely gain independent credibility.
But it doesn't look possible — in the debate, for instance, Romney explicitly said he would not accept any increase in tax revenue, especially the kind outlined in Simpson-Bowles. Democrats have also said that the cuts go too deep on Social Security.
There is one way that the commission could come back into vogue, though.
Because of the deal last year to avoid hitting the debt ceiling and the resulting failure of the congressional super committee, mandatory across the board cuts called sequestration go into effect at the end of this year — one half of the "Fiscal Cliff" —  unless Congress can pass a bill to avoid it.
Simpson-Bowles — or perhaps a scaled-back version of it — would do the trick. It could also serve as the blueprint for the "Grand Bargain" so many people were interested in last summer.
In short, Simpson Bowles is the new issue this election. Both sides have the capability to claim it as their own, and either way both sides will be talking about it for the remainder of the race.
If the frenzied Google traffic is any indication, people are certainly interested in hearing more about it. Whether that means that a candidate will have the popular mandate to pursue it, though, is another question entirely.