The authors of a US deficit reduction plan that failed to win approval in 2010 put forward a revised version on Tuesday that would slash the deficit by $2.4 trillion over 10 years.
The plan re-jigs the timeline of their earlier proposal, while encouraging lawmakers to take a step-by-step approach with the first steps being the 2011 budget talks and a recent deal on taxes.
The new framework by former Republican senator Alan Simpson and Erskine Bowles, ex-chief of staff to president Bill Clinton, would raise $600 billion in new revenue through reform of the tax code and maintain a three-to-one ratio of spending cuts to tax hikes, AFP reported.
It also demands substantial reforms to cherished health care entitlement programs like Medicare and Medicaid.
President Barack Obama, whose administration has called for $1.5 trillion in deficit reduction over the next decade, wants fewer cuts to entitlements, while rival Republicans insist on no new taxes.
"We need a grand bargain, and to get a grand bargain, both sides will have to get out of their comfort zone," Bowles said at a Politico breakfast to unveil the new plan.
With the first two steps already taken, the next step would be the enactment of major tax and entitlement reform this year accompanied by additional cuts in spending, such as a change in how much is paid out in future Social Security benefits.
Step 4 would be to make Social Security and Medicare solvent and sustainable over the long term, the two men said.
"If (Obama) doesn't get a handle on entitlements and the solvency of Social Security, he will have a failed presidency," Simpson said.
The new plan comes just 10 days before some $85 billion in automatic spending cuts to military and domestic programs kick in on March 1 if Congress does not act.
Bowles and Simpson were the co-chairmen of the National Commission on Fiscal Responsibility and Reform.
They gained a reputation as centrist deficit-cutters but their high-profile 2010 plan went nowhere in Washington's hyper-partisanship climate.