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Deficit-cutting plan fails to advance to Capitol

Deficit-cutting plan fails to advance to Capitol

December 4th, 2010 in News

President Barack Obama's deficit commission failed Friday to forge consensus on what to do about an increasingly urgent debt problem, but the breakdown of its vote lays out the road map for how Congress might address it next year.

The 11-7 vote in favor of the panel co-chairmen's recommendations for a painful mix of spending cuts and tax increases foretells a bitterly partisan and possibly unproductive debate in the House. If there's a deal to be had, it will likely be reached in the Senate. Fourteen votes were needed to officially send the plan to Congress now for quick action on it.

About $4 trillion would be slashed from the budget over the coming decade - threefourths of it through spending cuts and the other fourth from higher taxes. Deficits over the period are estimated in the $10 trillion range and are expected to require the federal government to borrow up to 33 cents of every dollar it spends.

Five of six senators on the panel - two Democratic allies of Obama and three conservative Republicans - voted for the plan's wrenching measures, including raising the Social Security retirement age, cutting future benefit increases and rolling back popular tax breaks like the mortgage interest deduction.

But only one of the half dozen House members on the commission endorsed the proposal - Democrat John Spratt Jr. of South Carolina. And he doesn't have to face voters in his district again; they decided last month to retire him from Congress.

No other House members were willing to swing behind the painstakingly assembled proposal by Democrat Erskine Bowles, a White House chief of staff in Bill Clinton's presidency, and former Republican Sen. Alan Simpson of Wyoming. Republicans Reps. Paul Ryan of Wisconsin, Dave Camp of Michigan and Jeb Hensarling of Texas recoiled from tax increases and said it didn't do enough to rein in skyrocketing health care costs. Not one of them even attended the panel's final meeting.

House Democrats Xavier Becerra of California and Jan Schakowsky of Illinois, meanwhile, pressed for bigger tax increases and less dramatic cuts to spending.

"The Bowles-Simpson plan further erodes the middle class and threatens low-income Americans," said Schakowsky.

The ink wasn't even dry on an earlier version of the proposal before House Speaker Nancy Pelosi, D-Calif., called it "simply unacceptable," a move that Republicans said undercut the panel's work.

The plan would nearly freeze the Pentagon's budget and cut spending outright by most domestic agencies. It would nearly double the federal tax on gasoline with a 15 cents-per-gallon increase. Income tax rates would fall, but only by eliminating or scaling back dozens of popular tax breaks, including the child tax credit, mortgage interest deduction and deduction claimed by employers who provide health insurance.

That recipe of shared political pain is the type of sacrifice that budget hawks say is needed in any bipartisan deficit-cutting effort.

"People have to be willing to embrace plans which actually lend themselves to compromise ... the kinds of plans that everybody's uncomfortable with but are the only things that get support," said Maya Mac-Guineas of the Committee for a Responsible Federal Budget, a group that advocates fiscal responsibility.

"That's where the Senate is. That's not where the House is," MacGuineas added. "I think that shows that the Senate is going to be the real place of leadership on this."

President Obama reacted cautiously. He praised the commission for its work and promised to closely study its proposals, but didn't endorse any of them.