Senate Majority Leader Harry Reid, D-N.V., tapped Senator Patty Murray, D-WA., to co-chair a new bipartisan deficit “super committee” on Tuesday, while Senators John Kerry, D-Massachusetts, and Max Baucus, D-Montana, will join Murray on the panel, officially called the Joint Committee on Deficit Reduction.
Under the guidelines of the debt ceiling deal reached last week, the new bicameral 12-member panel — six Democrats and six Republicans — is charged with identifying at least $1.5 trillion in deficit reductions by Thanksgiving. The group plans to find savings from a proposed overhaul in the tax code and changes to programs such as Social Security, Medicare and Medicaid.
Murray is the chairman of the Democratic Senatorial Campaign Committee and has served on both the Senate Budget and Appropriations committees. Baucus is chairman of the powerful Senate Finance committee and served on the White House appointed deficit commission until it fell apart in late June. Kerry, a 2004 Democratic presidential nominee, reportedly had been lobbying for a seat at the table.
“I have appointed three senators who each possess an expertise in budget matters, a commitment to a balanced approach,h and a track record of forging bipartisan consensus,” Reid said in a statement. “As the events of the past week have made clear, the world is watching the work of this committee. I am confident that Senators Murray, Baucus and Kerry will bring the thoughtfulness, bipartisanship, and commitment to a balanced approach that will produce the best outcome for the American people.”
Reid added Murray has “a depth of knowledge on budget issues and demonstrated her ability to work across party lines.”
In naming the trio, Reid opted against picking Democrats like Budget Committee Chairman Kent Conrad of North Dakota or Dick Durbin of Illinois, who backed curbs on Medicare spending and Social Security benefits as members of President Barack Obama’s deficit commission.
Congressional leaders have until August 16 to announce their picks. There has been mounting speculation about who Senate Minority Leader Mitch McConnell, R-Ky., will pick for the three Senate Republican positions. One name being floated as a likely choice is freshman Sen. Rob Portman, R-Ohio, a former House member and White House budget director under President George W. Bush.
The stakes are high for the committee to produce big deficit cuts before the year’s end. And a predominant theme in Standard & Poor’s announcement to downgrade the U.S. was its highly combative tone of the political process in Washington. “We think, compared to some other highly rated governments, the U.S. government does not have the same proactive ability to achieve long term solutions that put public finances on a firm footing,” said John Chambers, chairman of S&P’s sovereign ratings committee.
The use of special commissions to address deficit reduction, like the Bowles-Simpson commission, is hardly new and has had a rocky past, with few able to score real impact due to dangerous brinkmanship. “If you can't compromise on anything, go home,” former Sen. Alan Simpson told NPR. “If you can't learn to compromise on an issue without compromising yourself, then you shouldn't be a legislator.” He said it’s going to be painful to get the country back on a fiscally responsible path. He used one of his many colorful analogies to describe that process: "It's going to be like giving dry birth to a porcupine."
As the super committee is formed, a possible point of contention may be focused on which budget that baseline lawmakers will start with to calculate deficit savings. Republicans prefer to start with current law, in which the Bush tax cuts are set to expire at the end of the year. If the Bush era tax cuts were allowed to expire, it would generate $3.5 trillion over 10 years and would require deeper cuts to achieve deficit reduction. Democrats support using an alternative baseline and use the current one as a measuring stick.
The now defunct Biden panel, which received high praise for its effectiveness in identifying more than $1 trillion in spending cuts acceptable to the two parties, interestingly enough did not come to a consensus on a baseline but rather focused on spending cuts. If this new super committee agrees to a baseline, but fails to come up with $1.5 trillion in deficit reduction by their deadline, budget triggers are in place to make $1.2 trillion in cuts across the board.