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Same goal, opposing plans for debt ‘supercommittee'

Wednesday, September 14, 2011

(Photo)
Congressional Budget Office director Douglas Elmendorf testifies Tuesday on Capitol Hill in Washington, D.C., before the Joint Select Committee on Deficit Reduction.
(J. Scott Applewhite ~ Associated Press)
WASHINGTON -- Digging in for a bruising struggle, Republicans on Congress' deficit-fighting "supercommittee" targeted Social Security and government health care spending Tuesday while Democrats pressed for higher tax revenue as part of any deal to reduce red ink by at least $1.2 trillion over the next decade.

There were no ultimatums from either side, and there was even a fleeting suggestion that tax reform might eventually clear the way for the bipartisan agreement that both sides say they want.

Yet with the Census Bureau reporting national poverty at a 28-year high and partisan struggles flaring elsewhere in Congress, the events underscored the challenge the 12-member panel faces as it gropes for a deal that can clear Congress and win President Barack Obama's signature by year's end.

With the nation's debt high and surging and the population aging, "Citizens will either have to pay more for their government, accept less in government services and benefits, or both," Doug Elmendorf, the head of the nonpartisan Congressional Budget Office, told supercommittee.

Though the choices are difficult, he said, the problem "need not be viewed as unsolvable."

Yet the challenge is complicated, he said, if the lawmakers' are hoping to revive the economy in the short term and to cut federal deficits in later years. In that case, "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."

The committee has until Nov. 23 to recommend legislation, but Elmendorf said the essential decisions must be made as much as three weeks earlier than that to make sure they are drafted into a bill and their impact on the federal budget calculated carefully.

The panel was created last month as part of a compromise that avoided a threatened government default and cut nearly $1 trillion from some federal programs.

In addition to the original goal of cutting long-term deficits, Democrats want much or all of Obama's week-old $447 billion jobs proposal put on the agenda, significantly increasing the amount of savings that must be found.

"My question to Congress is: What on earth are we waiting for?" the president asked rhetorically as he visited Columbus, Ohio, to campaign for the enactment of his program of Social Security payroll tax cuts and spending increases for highway projects and other domestic programs.

Republicans are likely to accept some or all of the tax cuts Obama wants, but the spending increases shape up as a tougher sell. GOP leaders point out that the administration's call for higher taxes on the wealthy has faced opposition from some Democrats as well as Republicans in the past.

Past efforts to reach compromise on major debt-reducing proposals have run aground over mutually exclusive demands -- Republicans opposed to raising taxes and Democrats against cutting benefit programs.

But Obama has made clear he is willing to consider spending cuts this time around, and Boehner has said he put additional revenue on the table in negotiations with the president last summer that ultimately collapsed.

At the time the two men were considering tax reform that would generate growth -- and about $800 billion in additional tax revenue over a decade -- while lowering rates and closing loopholes.

Sen. Max Baucus, D-Mont., briefly raised the issue of tax reform at Tuesday's supercommittee hearing, asking Elmendorf if "revenue equal" overhaul of the existing code would help the economy grow.

The CBO director said it was possible, adding he couldn't say how big the impact might be.


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