After nearly two days of lawmakers from both sides of the aisle pummeling President Obama’s 2012budget plan for failing to address long-term debt and entitlement problems, several Senate Republicans on Tuesday stepped forward and challenged the White House to swiftly begin bipartisan negotiations on a strategy for driving down the long term debt.
“I really do believe this is the year for Social Security reform,” Sen. Lindsey Graham, R-S.C., told White House Budget director Jacob (“Jack”) Lew during a hearing on Obama’s budget before the Senate Budget Committee. “There are a lot of Republicans who realize entitlements need to be put on the table. But we’re reluctant to go alone.”
Sen. Mike Crapo, R-Idaho, who served on the president’s bipartisan fiscal commission, said he was discouraged that Obama “took a pass” on devising a comprehensive plan for addressing the long term debt and urged the administration to embrace the fiscal panel’s proposals. And Sen. John Ensign, R-Nev., declared, “We are willing to join the president on entitlement reform” and “take the tough votes,” but “we desperately need White House leadership.”
In a town where Democrats and Republicans are constantly at each other’s throats, an invitation from one party to another to plunge into politically hazardous talks on controlling Social Security, Medicare and Medicaid costs invariably is viewed as a trap–and Obama and his budget director were predictably cautious in their responses. Obama said repeatedly during a White House news conference that he would be willing to use the report of his fiscal commission released last December as the “framework” for talks about major entitlement reform and spending, but cautioned that it would be a lengthy process requiring much give and take by both parties.
“This is going to be a process in which each side, in both chambers of Congress, go back and forth and start trying to whittle their differences down until we arrive at something that has an actual chance of passage,” Obama explained. “And the key thing that I think the American people want to see is that all sides are serious about it and all sides are willing to give a little.”
Lew, a veteran budget negotiator who worked previously in the Clinton administration and for the Democratic House leadership, noted that “It’s not always the case that putting a specific proposal out there advances things most quickly.”
“I personally believe that if you look at the last 20 to 30 years, sometimes putting out a proposal slows things down because it polarizes the sides and [Democrats and Republicans] dug in,” Lew told the Senate Budget Committee. “We need to figure out a way to have conversations that gets the parties talking together.”
At issue is Obama’s $3.7 trillion budget for the fiscal year that begins Oct. 1. The plan includes a five-year freeze on all discretionary spending outside of defense and national security, slowing the growth in the Pentagon budget and eliminating or downsizing 200 programs to achieve $1.1 trillion of deficit savings over the next decade. The president and administration officials defended the budget plan, boasting that it would gradually reduce the deficit – now pegged at a record $1.6 trillion or nearly 11 percent of the overall economy – to only $607 billion or 3 percent of Gross Domestic Product.
“If you look at what the mandate of the fiscal commission was, it was to bring the deficit down to 3 percent of GDP by the middle of the decade,” Lew told the House Budget Committee yesterday morning. “Our budget does that.”
He also said the budget’s calls for a federal pay freeze, medical malpractice reform, government reorganization, and the application of pay-as-you-go rules to the Transportation Trust Fund are examples of the White House adopting fiscal commission ideas.
But skeptical members of both the House and Senate Budget Committees repeatedly assailed the budget as a ‘disappointing’ display of overspending and overtaxing that is not to be taken ‘seriously,’ as the nation is overwhelmed by debt.
“The President has abdicated his leadership role,” said House Budget Committee Chairman Paul Ryan, R-Wis., who also served on the president’s fiscal commission – but voted against its final recommendations. “First, he punted to a bipartisan commission to develop solutions to the problem. Then, when his own commission put forward a set of fundamental entitlement and tax reforms, he ignored them!”
“We all know that this debt is becoming a crisis, and you’re not even touching these [entitlement] programs,” Ryan told Lew. You’re assuming the economy’s going to take off in a year in which you’re raising taxes everywhere.”
“To put a budget before the American people that doesn’t address the entitlement issues is reckless and irresponsible,” said Tom Price, R-Ga. “Our constituents are scared to death and they don’t see any leadership coming out of this administration as it relates to the entitlements. Where’s the plan?”
Rep. Chris Van Hollen of Maryland, the ranking Democrat on the House Budget Committee, praised Obama’s budget as effective “tough love” in dealing with sensitive spending programs, but added: “As we debate the best way forward, our conversation must include a comprehensive review of our national balance sheet. It is simply short-sighted to think we can try to balance our budget through cuts in domestic discretionary spending alone – a category that represents only 12 percent of the overall budget. We must also look to other areas, including comprehensive tax reform and eliminating special interest breaks in the tax code.”
Rep. Debbie Wasserman Schultz, D-Fla., deemed Obama’s budget a realistic and credible blueprint. “When casting assertions about a lack of a plan, I think they [the GOP] should look inward first.”
Lew said it was unfair to say that the administration budget didn’t deal with entitlements, citing the $62 billion worth of savings it laid out over the next two years. “We’re dealing with the short-term and the medium term, and we’re trying to leave as much open for discussion so there is an environment where we can actually reach agreement,” he said. “The easiest thing to do is to polarize the environment, and we’re deliberately leaving room for that conversation.”
But on the Senate side, Lew encountered tough questioning from Budget Committee Chairman Kent Conrad, D-N.D., who fears that publicly held debt could rise to as much as 100 percent of GDP by the end of the decade. “I believe it without question that we are on a course that will lead to a financial disaster,” he said. “And it is our responsibility to bring the country back from the brink. It’s our obligation, and it’s got to start here.”
Sen. Jeff Sessions of Alabama, the ranking Republican on the Budget Committee, echoed Conrad’s sentiments about Obama’s budget. “It was one of his last chances to put forward a serious proposal to address our growing financial crisis,”Sessions said. “And our crushing debt undermines confidence in our economy, weakens our standing in the world and results in devastating job losses to Americans . . . . And yet the president has submitted a budget yesterday that fails to change the course. It was a very unserious response to a very serious problem.”
Budget Boss Jack Lew Grilled on Capitol Hill (ABC News)
Appeals to Republicans to Work Together on Entitlements (MarketWatch)
Boehner: GOP Will Not ‘Punt’ on Entitlements (The Hill)