Obama Exploits ‘Super Committee’ to Push Job Plan
Policy + Politics

Obama Exploits ‘Super Committee’ to Push Job Plan

AP Photo/J. Scott Applewhite

The new congressional “Super Committee,” created to help cut $1.2 trillion or more from the long-term deficit, is being exploited by President Obama as a vehicle to promote his new $447 billion jobs program, greatly complicating the panel's daunting task. Republicans are steaming over Obama's proposed $400 billion in tax increases on high earners, and once again, the possibility of the two parties uniting in order to pass legislation is fading.   

Republican members of the 12-member bipartisan committee, which held their first public hearing Tuesday afternoon,  were clearly irked by  Obama's request to include his jobs program in their discussions with some fretting  that there won’t be enough time before their Nov. 23 deadline to reach consensus on an adequate deficit reduction plan. “This proposal would make the already-arduous challenge of finding bipartisan agreement on deficit reduction nearly impossible, removing our options for deficit reduction for a plan that won’t reduce the deficit by one penny,” Rep. Jeb Hensarling, R-Texas, the committee co-chairman, said. "It's not the role of this committee to spend more money we don't have on jobs we don't get."

This is not the first time Obama has used a prominent deficit-reduction panel for strategic purposes. He created a presidential fiscal responsibility and reform commission in early 2010 to recommend ways to reduce the deficit in part to buy time before he had to address the problem directly.  And after the commission, headed by Democrat Erskine Bowles and Republican Alan Simpson, released its recommendations last December, the president declined to endorse the proposals for $4 trillion of long-term savings.   .

“I think the administration should have the responsibility for providing the details and not ducking it to the committee,” said Charles Kolb, president of the Committee for Economic Development, a business lobbying group. “There’s been a pattern with this administration of asking somebody else to do the work. At some point you’ve gotta bite the bullet and do it yourself.”

During today's meeting, Douglas Elmendorf, director of the non partisan Congressional Budget Office,  told the committee it needs to more than double its mandated $1.2 trillion deficit reduction goal to significantly make a dent in the long-term national debt – and that might well require increasing tax revenues.

“The nation cannot continue to sustain the spending programs and policies of the past with the tax revenues it has been accustomed to paying,” Elmendorf said. “Citizens will either have to pay more for their government, accept less in government services and benefits, or both.”

While he didn’t offer his own opinion on how they should tackle the deficit, he outlined different options to trim the more than $14 trillion public debt. Elmendorf said lawmakers would have to implement at least one of the following policies to achieve a sustainable federal budget: raise federal revenues; cut entitlement programs; or scale back non-entitlement spending. Right now, revenues as a share of GDP are approximately 15 percent, below the historical average of about 18 percent.

He said there is no “commonly agreed-upon level of federal debt that is sustainable,” but in order to lower the debt held by the public in 2021 to 50 percent of gross domestic product, lawmakers would need to reduce the deficit by at least $3.8 trillion over the coming decade including interest savings. Elmendorf said that rising interest payments, which could reach $6.2 trillion without a reduction in the deficit, could stifle the government’s ability to meet new obligations

"If policymakers wanted to achieve both a short-term economic boost and medium-term and long-term fiscal sustainability, a combination of policies would be required: changes in taxes and spending that would widen the deficit now but reduce it later in the decade," Elmendorf said.

Firing a warning shot about rising Medicare costs, Elmendorf painted a dismal picture of the U.S. economy saying that the aging population and the rising cost of health care will boost federal spending and that “the federal budget is quickly heading into territory that is unfamiliar to the U.S.”

Even as Elmendorf spelled out the consequences of delaying a deficit reduction package, he warned that “immediate spending cuts or tax increases would represent an added drag on the weak economic expansion.”

Republicans and Democrats on the panel differed on how to tackle the nation’s mounting deficit, primarily diverging on deep spending cuts and more tax revenue. Throughout the hearing, Republican Senate Minority Whip Jon Kyl of Arizona focused on entitlement programs. Targeting fraud and waste in Medicare and Medicaid programs   would attract bipartisan support, he said.  Rep. Fred Upton, R-Mich., echoed Kyl’t concern, but Elmendorf said there was no evidence that eliminating overpayments and abuse would yield large results towards reducing the deficit.

Kyl also suggested selling numerous unused government properties. Elmendorf responded that “most of the federal properties are shacks in the middle of nowhere” and there was no evidence this would reap a substantial amount of revenue.

Both Rep. Chris Van Hollen D-Md., and Sen. John Kerry, D-Mass., referred a letter sent to the committee by former lawmakers and business people who called on the group to “go big” and seek upwards of $4 trillion in deficit reductions. “Let's not duck those realities,” Van Hollen said. “Let's follow the advice of the three other bipartisan commissions, and go big.”  Kerry and Van Hollen reiterated their support for a mix of tax increases and spending cuts.