September 22, 2011
Absent some dramatic turnabout, the two parties appear to be setting up the vaunted “Super Committee” for a potentially colossal setback this fall as it searches for a compromise on debt reduction. The 12-member, bipartisan House and Senate panel is charged with identifying at least $1.2 trillion of fresh deficit reduction that Congress can vote on before the end of the year.
But even as the joint committee is meeting and assembling a staff, President Obama and House Speaker John Boehner, R-Ohio, have laid down mutually exclusive markers that would make it virtually impossible for the committee's six Democrats and six Republicans to reach a compromise. Obama this week vowed to veto any long-term deficit reduction package that doesn’t include higher taxes on the wealthy and corporations, while Boehner has repeatedly decreed that tax increases were “off the table.” Obama would also leave out reforms to Social Security.
If the panel, co-chaired by Sen. Patty Murray, D-Wash., and Rep. Jeb Hensarling, R-Tex., doesn’t meet its mandate, there will be automatic, across the board cuts in defense and domestic programs other than Social Security, Medicaid and veterans’ benefits totaling $1.2 trillion.
Just yesterday, Boehner said in a speech that while the Republicans and the White House may be able to find “common ground” on a few of the president’s proposals, including small business tax deductions and infrastructure projects, that raising taxes was out of the question. “Raising taxes on the American people is not the way to get our economy going again,” Boehner said.
And rather than standing back and giving the new committee breathing room to chart a bipartisan strategy for meeting its Nov. 23 deadline to send recommendations to Congress , Democrats, Republicans and advocacy groups are swamping the fledgling panel with decrees, demands, requests and analytical tasks that would be challenging even to a handful of permanent House and Senate committees.
“The language is not helpful if you’re trying to get a deal,” Erskine Bowles, the co-chairman of a presidential fiscal commission, said of the dueling political rhetoric between the White House and congressional Republicans. “It might appeal to the base, but the language itself isn’t helpful.”
House Majority Whip Kevin McCarthy, R-Calif., complained recently that practically every week, Obama “puts new criteria onto the committee” for deficit reduction and tax policy, without giving members a chance to “see where they are able to go.” Former Reagan White House Budget Director David Stockman warned yesterday that the committee could collapse of its own weight if the two sides aren’t careful in the way they are piling on. And Joseph Minarik, a former chief economist for the House Budget Committee and the Clinton White House budget office, said the verdict is out whether the joint committee will succeed or fail.
Obama and congressional leaders off-loaded responsibility for identifying additional reductions in spending and entitlements to the Super Committee.
“If people decide they want a solution and are willing to put everything on the table, they have got all the tools and all the legislative authority they need to reach an agreement,” Minarik told The Fiscal Times. “If people impose exclusive, mutually inconsistent directives, then it’s highly unlikely that these 12 people are going to go off on their own and break new ground in conflict with their own leadership and come up with an overall plan.”
Providing another reminder of how difficult it is to get a consensus on anything in Congress, a bill to keep the government funded past September 30 failed in the House Wednesday night, 230 to 195, because of sharp divisions within the Republican majority over funding disaster aid and other issues. Boehner and other House leaders were stunned by the more than 40 Republican defections, and were scrambling today to come up with a way to avert a government shutdown.
By creating the super committee as part of last summer’s bitterly negotiated deal to reduce the long term deficit by nearly $1 trillion while raising the debt ceiling, the White House and congressional leaders essentially off-loaded responsibility for identifying additional reductions in spending and entitlement programs to the Super Committee. For now, Obama, Boehner, Senate Majority Leader Harry Reid, D-Nev., and other leaders can drop their suggestions into the super committee’s “in box.”
At the same time, the joint committee is being bombarded with recommendations from government think tanks and advocacy groups to “go big” by pressing for a comprehensive plan of spending cuts, entitlement reforms, and changes in the tax code to achieve at least $4 trillion of deficit reduction over the coming decade.
Just yesterday, the Committee for a Responsible Federal Budget hosted a three-and-a-half hour “Go Big” forum on Capitol Hill to try to generate support for a major package of $4 trillion or more to fix the budget and put the debt on a more sustainable path as a percentage of the overall economy. Maya MacGuineas, president of the CRFB, said that if the joint committee really “wants to actually fix the problem,” they will “need something bigger than what they are looking at.”
Former Federal Reserve Board Chairman Alan Greenspan, who appeared at the forum, said the committee should shoot for $5 trillion to $6 trillion of deficit reduction, while Stockman said they should go for $10 trillion of deficit reduction. Sen. Mike Crapo, R-Idaho, has joined the growing bipartisan chorus urging the panel to “go big” and pursue an aggressive $4 trillion deficit package over 10 years.
“At the end of the day with everyone beating you up, you know you are going to do wrong no matter what you do with somebody. That empowers you.”
Crapo, a former member of the Bowles-Simpson commission and the Senate “Gang of Six,” said in an interview that he is “hopeful” the committee will achieve the $4 trillion mark – the same amount of long-term savings proposed by the Bowles-Simpson commission and other committees. He stressed that these other groups already have done the heavy lifting in identifying savings and how to stabilize the federal debt in the coming decade. “This is not the kind of situation of how do we get there,” Crapo said.
Murray, the other co-chair, dismissed speculation that her commission might be buckling under all the political pressure and attention it is receiving. “I think everybody on the committee understands the significant challenges that this country faces both fiscally and about American confidence, and we are all working to meet that goal,” she told The Fiscal Times yesterday.
Rep. Kurt Schrader, D-Ore., chair of the House Blue Dog Task Force on Fiscal Responsibility, said he is optimistic the committee will succeed but acknowledged that members will have to withstand intense political pressure from party leaders and special interests before the year is out. “Not only are they getting beat up to include extra things, this is the only bill that might pass this session of any substance,” he said. “At the end of the day with everyone beating you up, you know you are going to do wrong no matter what you do with somebody. That empowers you.”
Schrader said it’s a bad idea that the White House, lawmakers, and advocacy groups are loading up the joint committee with their wish lists. Instead, he supports development of a “clean” bill to address the deficit, while having Congress address Obama’s and the Republicans’ economic and jobs measures separately.
The pressures being put on the super committee are already multiplying rapidly. For example,
- Obama announced a $447 billion package of tax incentives, aid to the states, and public works projects to jumpstart the economy in a Sept. 8 speech to a joint session of Congress. A week later, the administration revealed that the jobs package would be financed by raising taxes on wealthier Americans and fund managers, eliminating tax loopholes for oil and gas companies, and changing the tax treatment of corporate jets. Obama included those tax proposals in a broader, $4 trillion debt-cutting package he announced on Monday in a White House Rose Garden speech.
- Speaker Boehner last Thursday called on the super committee to consider a major overhaul of the federal tax code that would close wasteful loopholes but not raise tax rates or overall tax revenue. In a speech to the Economic Club of Washington, D.C., Boehner first insisted that proposed tax increases to help reduce the long-term deficit were “off the table.”
- Senators John McCain, R-Ariz., and Tom Carper, D-Del., sent a letter to the super committee this week urging its members to include a proposal that would give the president a statutory line-item veto authority to reduce wasteful spending.
- The International Monetary Fund on Tuesday revised its economic forecast for the year and warned that the already painfully slow U.S. economic recovery could be further threatened if Washington failed to produce a credible proposal that cut government spending in the near term.