CQ TODAY ONLINE NEWS
Oct. 9, 2011 – 12:53 p.m.
Deficit Panel’s Silence Could Spell Progress
By Paul M. Krawzak, CQ Staff
Despite the odds against striking a major deal, members of the joint deficit reduction committee are making what seems like progress, particularly when compared with the acrimony and walkouts that derailed earlier budget talks this summer.
Panel members remain serious and optimistic: All the principals are still at the table and appear to be in the early stages of serious negotiations. Although precious few details have leaked out of those talks, members’ insistence on keeping their discussions private suggests a high level of commitment to achieving their statutory charge by Thanksgiving.
“The fact that nobody knows what they’re talking about means that they’re seriously talking,” said Sen.
Committee members say their chances of agreeing on at least $1.2 trillion in deficit reduction are improved if they keep their discussions private, preventing interest groups and others from picking apart or attacking proposals under consideration.
Nevertheless, it is clear the panel has engaged in substantive discussions, covering such political land mines as an overhaul of entitlement programs and the tax system, all while searching for common ground.
Emerging from the committee’s most recent private meeting on Oct. 6, Rep.
Sen.
Still, bridging political differences over new revenue and major spending cuts has stymied previous good faith talks between the White House and Republicans. And regardless of the genuine optimism, no member of the committee sees a deal as a sure thing.
Leaving the most recent meeting, Rep.
The full committee has met more than half a dozen times in private and several times in public, including two public hearings that it held to examine the drivers of the $14 trillion national debt and the intricacies of the tax system. In addition, the Republicans on the panel have met frequently, as have the Democrats.
In its meetings so far, the committee has delved into overhauling the tax code, federal health care spending, non-health mandatory spending and Social Security.
Perhaps indicating the sensitivity of the talks, the panel excused staff from the room during the last hour of a recent session when Social Security was discussed. The committee has asked staff to leave at least once or twice previously, according to a person with knowledge of the panel’s deliberations.
Discussions Evolving
Deficit Panel’s Silence Could Spell Progress
The panel began its work with a discussion of what one aide termed “big picture issues.” Since then, the conversation has evolved into something that at least in part resembles negotiations, according to lawmakers.
“I think there’s been a lot of shaping and framing, but negotiations take time,” said Sen.
Asked if the committee was engaged in negotiations or still laying out ideas, Hensarling said, “I would say we’ve been negotiating.”
Murray described a sort of policy dance in which members of both parties are trying to figure out what might be acceptable to the other side.
“We’re all looking at what we can be comfortable with offering,” she said after Democrats on the committee asked that several scheduled meetings of the committee be put off to give Democratic members more time to huddle among themselves. “Everything’s on the table. We’re looking at alternatives.”
The committee talks began as an educational exercise, especially in connection with the complicated topic of overhauling the tax code. While some panel members are familiar with tax issues, including Senate Finance Chairman
“You know, we’re a big complicated country, there’s a lot to learn and the learning curve for some is a little steeper than for others,” Baucus said after one meeting. There is a real desire, Baucus said, to “make sure we do this right.”
Finding common ground on revenue may be a prerequisite to agreeing on any other elements of a deal. It is also probably the most challenging issue.
The two parties have been at loggerheads, with Democrats insisting on increased revenue as a condition for agreeing to further spending cuts, and Republicans adamantly opposed to anything that might be construed as a tax increase.
As a result, the committee is searching for a way to boost receipts without directly raising taxes. That would almost surely require a broad rewrite of the tax code, trimming benefits to cover the cost of a reduction in rates. That, many lawmakers hope, might yield higher economic growth, and ultimately increase the amount of taxes paid to the government.
Auctioning off pieces of the broadcast spectrum offers another partial solution.
Four members of the committee on Oct. 7 sent a letter to President Obama asking for his administration to explore reallocating existing broadcast spectrum as well as auctioning off spectrum in order to raise receipts.
“Spectrum auctions would generate tens of billions of dollars in auction proceeds, help the select committee meet its deficit reduction goals, stimulate billions in private-sector capital investment, provide a job-creating boost to the economy, and ensure that America continues to lead the world in wireless broadband innovation,” said the letter from House Energy and Commerce Chairman
Deficit Panel’s Silence Could Spell Progress
Since Republicans are not opposed to higher tax revenue that results from strronger growth, the committee has also looked at alternative revenue projections that would account for economic growth — something known as dynamic scoring.
Although the concept is controversial, if a tax plan might be depicted as raising revenue wholly or primarily through economic expansion, it might smooth the way to an agreement.
Subgroups Form on Panel
As the committee has continued to meet, subgroups of the panel have begun to form and individual members have drilled down into specific issues. “Different members work on different assignments,” Hensarling said.
Toomey and Sen.
Hensarling said Thursday he considers it “still possible” for the panel to produce some form of tax overhaul.
Some outsiders are skeptical.
“There’s no way they can do total tax reform,” said
Sen.
“I think the American people have a right to know what kind of discussions are taking place, but the most important thing is what the end result will be,” Sanders said.
Sam Goldfarb, Frances Symes and Joseph J. Schatz contributed to this story.