A new bipartisan House-Senate committee charged with finding $1.5 trillion of long term savings began to take shape on Wednesday, as House Speaker John Boehner, R-Ohio, and Senate Minority Leader Mitch McConnell, R-Ky., revealed their choices for the 12-member, high-profile panel.
With enormous pressure growing on Congress and President Obama to develop a long-term plan for reducing the deficit while addressing the current economic crisis that is roiling the markets, congressional leaders have turned mostly to seasoned lawmakers with considerable experience in budget and tax issues. But they have also included at least one senator with strong ties to the Tea Party.
Boehner selected Ways and Means Committee Chairman Dave Camp, R-Mich., Energy and Commerce Committee Chairman Fred Upton, R-Mich., and Rep. Jeb Hensarling, R-Tex., a member of the Financial Services Committee to serve on the panel. McConnell’s choices were Majority Whip Jon Kyl, R-Ariz., and two freshmen -- Sen. Rob Portman, R-Ohio, and Sen. Pat Toomey, R-Pa.
Toomey was one of 26 senators to vote against the debt-ceiling agreement, saying it would do “nothing to deal with the path of our government’s unsustainable deficit spending.” The former House member and president of the conservative Club for Growth is part of the Tea Party wing of Congress, and is viewed by some as a bridge between more conservative and moderate members of the Senate.
Senate Majority Leader Harry Reid, D-Nev., on Tuesday selected Sen. Patty Murray, D-Wash., Finance Committee Chairman Max Baucus, D-Mont., and Sen. John Kerry, D-Mass., to the joint committee. Murray, a liberal Democrat and chairman of the Democratic Senatorial Campaign Committee, and Hensarling, a prominent conservative and chairman of the House Republican Conference, will serve as co-chairmen of the committee, which will be responsible for proposing a major package of savings to Congress by late November.
“It’s going to take palpable fear, like what the market
has been doing and continued bad unemployment
numbers, for this group to put aside their own views.”
House Minority Leader Nancy Pelosi, D-Calif., must make the final three choices to the panel before next Tuesday’s deadline, and is likely to choose at least one other woman or minority to serve on the committee. Murray was a frontrunner for a seat on the committee, because she is in line to become the next chairman of the Budget Committee if the Democrats retain control of the Senate next fall. But some Republicans reportedly have complained that she is too political for the joint committee because of her role as head of the Democratic campaign committee.
The deal reached by President Obama and Congress last week to raise the debt ceiling will impose spending caps on domestic and defense programs to achieve $917 billion in savings over the next 10 years, while the new joint committee will have until Nov. 23 to devise a plan to slash $1.2 trillion to $1.5 trillion more from the deficit over the coming decade.
The outcome of the committee’s deliberations will be critical in determing the credibility of the debt ceiling package hammered out by Obama and the congressional leaders to avert a default on U.S. debt. In downgrading the government’s AAA credit rating late last week, Standard & Poor’s stressed the importance of the joint committee achieving its goals to begin stabilizing the debt. But because the panel will be equally divided between Republican and Democratic members, gridlock over taxes and spending cuts is highly likely.“It’s going to take palpable fear, like what the market has been doing and continued bad unemployment numbers, for this group to put aside their own views,” said Steve Bell, senior director of economic policy at the Bipartisan Policy Center. Bell added that he saw the group’s level of experience on cutting deals and dealing with the budget a plus in making headway on deficit cuts. “I am concerned -- with the pessimism in town -- about anything happening,” Bell said.
The committee will look most closely at potential savings in entitlement programs, as well as new tax revenues. If the panel fails to reach agreement – or if Congress rejects its recommendations – a budget enforcement mechanism will automatically be triggered to impose cuts in defense and domestic programs.
But House and Senate GOP leaders have repeatedly said they would oppose any tax increases as part of an overall package, while Obama and the Democrats insist that any agreement must be a balance of entitlement reforms and tax increases on the wealthiest Americans and corporations.
All six Republicans on the super committee have signed Washington lobbyist Grover Norquist’s anti-tax pledge. Tax increases had been a sticking point over the last few months during the debt ceiling negotiations and led to several budget talk collapses.
Yet by including Camp and Baucus on the committee, Republican and Democratic leaders have chosen their top guns to help negotiate any major changes to the federal tax code and health care legislation. Kyl has spoken repeatedly about the need for a major overhaul of the tax code, to reduce rates and eliminate wasteful deductions and credits, but he said recently he doubted the joint committee would be the right venue for that important debate.
“They need to tackle tax expenditures—loopholes and provisions in some form,” said Steve Ellis, vice president of Tax Payers for Common Sense. “I don’t think you can get to $1.5 trillion on savings without it. You can only cut so far in discretionary spending.”
What’s more, all of the Republicans on the panel support a Balanced Budget Amendment to the U.S. Constitution. Throughout the debt ceiling debacle this summer, House Republicans demanded a Balanced Budget Amendment be attached to raising the debt ceiling, which was so far out of the realm of political reality that it ultimately was not included in the final debt ceiling compromise.
Noticeably missing from the committee is House Budget Committee Chairman Paul Ryan, R-Wis., the chief architect of the House Republicans deficit reduction strategy, including a controversial proposal to convert Medicare to a government subsidized voucher program, and House Majority Leader Eric Cantor, R-Va., a conservative who repeatedly clashed with Obama during debt ceiling negotiations. In a statement, Ryan said he asked the Speaker not to choose him so he could focus on reforming the budget process.
Also missing were any of the Republican or Democratic members of the Senate “Gang of Six,” a group that made a last minute effort to push through a deficit reduction plan similar to the presidential Bowles-Simpson fiscal commission recommendations.
Where They Stand on the Issues
Yet many of the members have years of experience in government and have been involved in other important negotiations. Kyl, the second highest ranking Republican in the Senate, is a senior member of the Finance Committee and a leading advocate of pro-growth tax policies. Kyl is in his third term in the Senate and not up for re-election in 2012. He was the Senate Republicans’ lead negotiator in the deficit reduction talks led by the Vice President Joe Biden over the summer, but walked out with fellow Cantor over Democrats demands to raise taxes.
Upton, a moderate-turned conservative who heads the Energy and Commerce Committee, worked for the Office of Management and Budget under David Stockman during the Reagan administration. Stockman favors tax revenue increases as part of deficit reduction, but Upton is likely to vote against such an increase.
Portman, a former House member, served as a White House budget director and special trade representative during the administration of President George W. Bush. He will bring considerable budget experience and a pragmatist’s outlook to the assignment. Kerry, the former Democratic presidential candidate and foreign relations expert, has less experience with budget issues, but will help appease liberals who are concerned that the panel will slash entitlement programs.
Henserling, Camp and Baucus all served on the presidential fiscal commission last year, and all three voted against the final recommendations unveiled last November.
While McConnell chose two freshmen senators – Portman and Toomey -- Boehner stuck with veteran lawmakers. Shortly after the debt ceiling negotiation was signed into law, freshmen Rep. Tom Marino, R-Pa., unsuccessful began a lobbying effort on behalf of the 87-member House Republican freshman class, to press Boehner to include a freshman voice on the committee.