CQ TODAY ONLINE NEWS
Oct. 25, 2011 – 10:59 p.m.
Democrats Offer Sizable Deficit Plan
By Paul M. Krawzak, CQ Staff
Democrats on the joint deficit reduction committee floated the idea Tuesday of bigger budgetary savings than their statutory target requires, discussing a plan that would pare the deficit by almost $3 trillion over 10 years through a roughly even mix of spending cuts and revenue increases.
The proposal, presented to the panel by Sen.
One person familiar with the meeting said the plan was offered by the majority of Democrats on the 12-member panel as a way to reach out to Republicans.
The proposal generated heated discussion when Republicans, who have argued against any tax increases, raised questions about the revenue component. And not all Democrats on the committee supported the plan, either. Rep.
“We’re having a lot of hard, complicated discussions,” said Sen.
The fact that additional discretionary savings were part of the plan comes as no surprise as the panel steps up its effort to meet the 10-year deficit reduction goal of $1.2 trillion. Still, suggestions to trim appropriations come in the face of warnings from defense hawks and the White House that already-enacted discretionary cuts were severe enough.
The debt limit law (PL 112-25) that created the panel also set caps for annual appropriations over the next decade. But the panel has not ruled out additional cuts. And some lawmakers say any deal reached by the committee is bound to include further appropriations savings.
Focus on Discretionary Spending
The committee will address discretionary spending in public Wednesday when it holds a hearing with Congressional Budget Office Director Douglas W. Elmendorf as the expert witness. This is the panel’s third public hearing. The two prior hearings dealt with the drivers of the debt and with revenue issues.
Members of both parties have warned in recent weeks that discretionary spending, especially defense, cannot sustain additional big reductions after being capped in the debt limit increase law. That act holds growth in non-emergency discretionary spending below the rate of inflation over the next 10 years, and will reduce the deficit by almost $1 trillion as a result.
Last week, White House budget director
Citing the enacted caps, Lew wrote that “cutting already-tight discretionary program levels even further would be a serious mistake.” And although the letter was addressed to appropriators, its message might as easily apply to the work of the joint committee.
Beyond the hints of the savings proposed Tuesday by Democrats, little has been revealed about the specifics of the committee’s discussions, although it is widely assumed that both discretionary and entitlement spending are on the table, and Democrats and Republicans alike acknowledge that taxes are a centerpiece of the debate.
Democrats Offer Sizable Deficit Plan
Rep.
“Everything’s on the table,” Becerra said. “I don’t think we’ve excluded anything,” he said, “and until we take things off the table, everything’s open.”
Kerry indicated he was keeping an open mind about discretionary cuts. “I want to listen carefully,” he said after leaving a closed-door meeting of the committee. “I’m not going to make any judgments publicly at this point. We’re looking at everything, period. And we’ll see where we come out.”
Other lawmakers not on the panel also expect appropriations to remain a target.
“Some discretionary cuts are bound to be a part of it,” said House Appropriations Committee member
He and other lawmakers note that if the deficit panel members do not come together around a plan, discretionary spending will take most of the hit from automatic, across-the-board spending cuts — called a sequester — that would take effect beginning in January 2013.
“I’d rather take some medicine now and swallow it quick than it be much harsher and much longer lasting if we go into sequester mode,” Moran said.
Further discretionary cuts might be achieved by simply lowering the enacted discretionary caps, which would guarantee savings unless Congress made subsequent changes in the law. But the panel also could choose to target specific programs that it deems in need of reduction or elimination.
House Appropriations Committee member
In a report last week, the Committee for a Responsible Federal Budget estimated the joint committee might find $100 billion to $200 billion in discretionary cuts in a package that reduced the deficit by $600 billion to $800 billion over a decade. The group has urged the joint committee to aim for up to $4 trillion in savings to stabilize the debt and to address the rapidly growing cost of entitlement programs.
The organization estimated that if the joint committee achieved $3 trillion to $4 trillion in deficit reduction, additional discretionary cuts might rise to $400 billion.
Every Dollar Counts
Maya MacGuineas, president of the group, said discretionary savings laid out in its scenarios were based not on the joint committee’s discussions, but on an analysis of earlier deficit reduction plans, including the one produced last year by President Obama’s debt commission.
Democrats Offer Sizable Deficit Plan
MacGuineas said it is possible the joint committee will not include discretionary cuts in its plan.
But she said the larger the deficit reduction, the more likely that discretionary savings will be included. “To get anywhere real, you start including discretionary just because every $1 or at least every $100 billion counts,” she said.
Sen.
“I’ve pointed out to the Republican caucus that if you look at the Budget Control Act, discretionary spending, 39 percent of the budget, goes up only at the rate of inflation over the next 10 years,” Alexander said.
“Entitlement spending, 55 percent of the budget, goes up at three times inflation. Medicare and Medicaid goes up four times inflation,” he said. “So, it’s obvious where the problem is. And any solution that doesn’t address entitlements won’t be a real solution.”