Medicare: Bowles and Simpson will touch some nerves with their proposals to curb spending on Medicare and other health spending by $585 billion over a decade.
For instance, they would slowly raise the Medicare eligibility age from 65 to 67 by the mid-2030s. But at the same time, they propose creating a "buy-in" option for 65- and 66-year-olds so they, too, could receive Medicare benefits.
They would also change how Medicare beneficiaries pay for Parts A and B (the programs that cover hospital care and doctor visits).
In addition, they would expand means-tested Medicare premiums, so the highest income beneficiaries would pay even more for their premiums.
Their plan includes a host of health care delivery reforms as well.
Social Security: The plan calls on Congress to make the system solvent over the next 75 years. It also includes one specific and very controversial proposal: changing how annual cost-of-living increases are calculated for benefits .
Using "chained CPI" would be a more accurate way to measure inflation, proponents say. Some liberal economists disagree.
President Obama included the idea in his recent budget. Chained CPI would slow the growth rate in all federal payments that are inflation adjusted. Besides Social Security benefits, the change would affect civilian worker and military pensions, veterans' benefits, and Pell Grants.
The Bowles-Simpson plan includes protections against the effects of chained CPI for the most vulnerable Social Security recipients.
Chained CPI would also raise revenue, since it would slow changes to tax parameters that go up with inflation -- and that could mean somewhat higher taxes for many filers. Measures adjusted for inflation include income tax brackets, the standard deduction, phase-out levels for tax credits and contribution limits to 401(k)s.
All told, the chained CPI proposal would reduce deficits by an estimated $280 billion over a decade.