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Alan Simpson Presses for Larger 'Grand Bargain'

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The bipartisan leaders of a presidential deficit reduction commission, dismayed by the failure of the White House and Congress to reach a deal saving $4 trillion over 10 years, upped the ante Tuesday by pressing for an even larger "grand bargain."

Former Sen. Alan Simpson, a Republican, and former White House Chief of Staff Erskine Bowles, a Democrat, proposed that leaders of the two parties in Washington agree on an additional $2.4-trillion in savings beyond the $2.7-trillion agreed to so far. In the process, they put pressure on both sides.

"Either go big or go home," Simpson said.

In an interview on CNBC and other public appearances, they sided with President Barack Obama in calling on Republicans to accept an additional $600-billion in higher tax revenue. But they sided with Republicans in calling for $600-billion in cuts from Medicare and Medicare – more than Obama has agreed to.

"We're going to have to push the White House on healthcare, (and) we're going to have to push Republicans on revenue," Bowles said. In the new framework they announced, he added, "What we tried to do is make enough cuts in healthcare to slow the rate of growth on a per capita basis to the rate of growth of the economy. In our opinion, that takes about $600 billion to do over a 10-year period."

(Read More: Obama to Republicans: Can We Just Move On?)

Obama, in a public appearance of his own, pressed Republicans to compromise on revenue by citing the consequences of the budget "sequester" scheduled to take effect on March 1. As for Medicare and Medicaid, he pointed to the smaller $400 billion in savings that the original Simpson-Bowles report called for in December 2010.

"I am willing to cut more spending that we don't need, get rid of programs that aren't working," Obama said at the White House. "I've laid out specific reforms to our entitlement programs that can achieve the same amount of health care savings by the beginning of the next decade as the reforms that were proposed by the bipartisan Simpson-Bowles commission."

Republican Congressional leaders, for their part, dismissed Obama's remarks as campaign-style posturing and faulted the president for failing to spell out more spending cuts.

—By CNBC's John Harwood; Follow him on Twitter: @JohnJHarwood

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