With little time to spare, the congressional “Super Committee” began moving into high gear this past week to try to hammer out a deficit reduction package at a time when American pessimism about the direction of the economy – and the government’s ability to deal with it -- is at an all-time low.
The latest National Journal Heartland Monitor Poll found that public confidence in the stewardship of the economy has steadily eroded over the past year, with 70 percent of Americans saying the country is on the wrong track. And only 28 percent of Americans are confident that lawmakers in Washington will be able to reach an agreement to reduce the federal budget deficit.
This comes as the government confirmed that it ran another $1.3 trillion deficit in fiscal 2011, the second highest on record and the third straight year it has operated more than $1 trillion in the red.
On Friday, Alice Rivlin, the former White House budget director under President Bill Clinton, cautioned that failure by the committee to agree to at least $1.2 trillion of deficit reduction before a Nov. 23 deadline could send the economy reeling again. “If this committee fails, I think we may be facing a double-dip recession and a really long slog out of this problem,” she said at a Washington conference on the budget.
Rivlin, a fellow at the Brookings institution, also said that financial markets would not tolerate the Super Committee putting off big issues like taxes until after the 2012 election. Co-author of her own deficit reduction proposal last year, Rivlin also warned that minimalist action by the committee would not even stabilize the mounting federal debt as a percent of GDP. She and other budget watchdog groups are urging the 12-member bipartisan panel to “go big” and find at least $4 trillion in savings over 10 years.
Because Super Committee members for the most part have refused to discuss their private debates, no one on the outside really knows the extent of their progress. Rep. Chris Van Hollen, D-Md., a member of the committee, said on Friday that it’s “still unclear” if the panel will succeed and be able to bridge the ideological differences between the two parties. He refused to “handicap the committee’s odds” of success.
“What I can say is that the members of the committee are working hard,” Van Hollen said at a conference at the Newseum sponsored by Atlantic publications and the National Journal. “It remains our goal to try and reach an agreement,” Van Hollen said. “There are many of us – and I think you can see this from the statements that have been made at some of the hearings that they see this as a unique opportunity to really tackle some of these big challenges we face.”
By the end of last week, the Super Committee had received the last of a flood of recommendations from other permanent congressional committees on how to tame the nation’s deficit problems. Since the joint House-Senate deficit reduction panel began meeting in September its members have been aggressively lobbied by special-interest groups, think tanks and House and Senate colleagues.
Here are highlights of “wish lists” or recommendations submitted to the Super Committee by Congressional committees:
From House and Senate agriculture committees:
- Save $23 billion in farm and nutrition spending over 10 years
- Eliminate a $5 billion-a-year farm subsidy called “direct payments”
- Trim $4 billion from food stamps and other nutrition programs
From Republican and Democrat members of the House and the Senate House Armed Services Committee:
- Prevent deeper cuts in defense spending on top of the $450 billion in cuts already enacted
- Establish an annual enrollment fee for TRICARE, the military health care program, as supported by Sen. John McCain, R-Arizona
From Democrats on the House Energy and Commerce Committee:
- Spend $16 billion in the near term to create 560,000 jobs and save $150 billion over the next decade
- Fund a nationwide wireless broadband communications network for public safety agencies to create an estimated 100,000 jobs and save $15 billion
- Pass the Home Star energy efficiency bill, at a cost of $6 billion to help create 168,000 new jobs
From Democrats on the House Oversight and Government Reform Committee:
- Avoid cuts to any federal employees
- Reduce the stockpile of nuclear warheads from 5,000 to 500, to save $100 billion
- Restructure the U.S. Postal Service obligation to prepay its retiree health benefits and refund the $6.9 billion overpayment to the retirement program
From the Congressional Progressive Caucus:
- End the wars in Iraq and Afghanistan at a savings of $1.6 trillion
- Enact the Fairness in Taxation Act, also known as a millionaire’s tax, to generate $872.5 million
- Allow Medicare to negotiate prices with pharmaceutical companies to save $160 billion
While the Super Committee has until Thanksgiving to submit its final recommendations to Congress for action, members will have to submit their final proposal to the Congressional Budget Office (CBO) and the Joint Tax Committee several weeks before that, in order for those agencies to do estimates of their budgetary impacts. This means they only have about four more weeks to finish most of their work.
Van Hollen said that while a “’go big’ idea is still in the realm of possible” the Super Committee’s “ biggest enemy is time.”