Erskine Bowles and former Sen. Alan Simpson (R-Wyo.)—former co-chairs of President Obama’s deficit-reduction commission—unveiled a $2.4 trillion deficit-reduction proposal , which includes $600 billion in federal entitlement savings over a decade, in hopes of staving off the automatic cuts under sequestration that take effect on March 1. The automatic cuts involve nearly $1 trillion in across-the-board reductions, including a 2% reduction to Medicare reimbursement rates. The Simpson-Bowles proposal would replace and double the savings in the sequester, on top of the $2.7 trillion in deficit reduction enacted by the fiscal cliff legislation Obama signed in January. The plan would achieve the $600 billion in Medicare and Medicaid savings by decreasing provider payments, raising premiums for higher-income beneficiaries, reducing prescription drug costs, and making “adjustments to account for an aging population.” The plan also includes $600 billion in savings from tax code reforms and eliminating tax breaks, with the remaining savings coming from a mix of mandatory spending cuts and stricter limits on discretionary spending. Simpson and Bowles indicated they will unveil a more detailed plan in the coming weeks, after lawmakers have had a chance to review and comment on their proposal. The plan is more ambitious than the $1.5 trillion in savings Obama called for in last week’s State of the Union address but is significantly smaller than the estimated $4 trillion House Republicans are seeking to reduce the deficit over a decade. Source: California Healthline , February 20, 2012 .