The new Bowles plan has five components. They are as follows:
The first one is to tighten and increase the strength of discretionary caps so as to demand extra efficiency from Washington instead of abrupt across-the-board cuts done by restoring 70 per cent of sequestration cuts in 2013. At the same time putting a limit over the spending growth of defence and non-defence to inflation through 2025.The second is to reform federal health spending so as to decrease the subsidies for better off beneficiaries and reform and reduce provider payments. The third is to find additional spending cuts so as to decrease the subsidies of various governments, improve the military and civilian health. The fourth is to form a comprehensive tax reform that uses a “zero plan” model as the beginning point so as to decrease the size and number of tax expenditures in the code. The fifth is to implement government wide reforms so as to decrease waste, fraud, and abuse. It also helps to measure inflation more accurately (Fix the debt, 2013).