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Speaker McCarthy Eyes Debt Commission  06/09 06:13


   WASHINGTON (AP) -- House Speaker Kevin McCarthy is studying the history 
books and considering the appointment of a mix of lawmakers and business 
leaders as he lays the groundwork for a new commission to tackle the nation's 
growing debt.

   McCarthy is fresh off his biggest political victory since becoming speaker 
in January. He got the White House to negotiate on a bill that suspends the 
debt ceiling into January 2025 while also producing a projected $1.5 trillion 
in deficit savings over the coming decade. But the legislation only focused on 
a sliver of the federal spending that occurs each year and excluded programs 
such as Social Security, Medicare and Medicaid that account for the majority of 
government spending and are the biggest drivers of the debt.

   McCarthy has embraced the idea of establishing a new fiscal commission to 
find additional deficit reduction. While similar commissions have notched 
success in the past, the most recent ones failed to muster enough support for 
Congress to take up their recommendations. The speaker has asked Rep. Garret 
Graves, R-La., to work with him on the issue, which follows Graves' work as one 
of the lead debt ceiling negotiators in talks with the White House.

   "I'm studying different angles to see what would best work, some with 
members. And should I bring in some people from the outside so you have some 
modern people in the business world that have taken companies and looked at 
them in a way to streamline and modernize for efficiencies?" McCarthy said. "I 
think that combination would work well, but right now I'm spending a lot of 
time on how to put that together."

   Many analysts say it will take a combination of spending cuts and tax hikes 
to meaningfully change the country's financial trajectory. But therein lies the 
problem: Many Republicans won't entertain tax increases of any kind, and many 
Democrats won't consider benefit cuts.

   McCarthy refused to accept any tax increases as part of the debt ceiling 
talks. And when asked if he had any such red lines for the debt commission, 
McCarthy said he currently is focused on getting the structure of the 
commission right, but added that the revenue coming into government coffers, 
about 19.2% of gross domestic product last year, is at the high end of the 
50-year average.

   Democrats are treading warily. "I'm not sure what he envisions, but I look 
forward to having that discussion," said Minority Leader Hakeem Jeffries, 
D-N.Y. "I have no idea what the contours of the commission would even look 
like, so it's hard for me to comment up or down at this point."

   The landmines confronting the commission are legion. Even if McCarthy can 
get something through the House, the commission's clout would be diminished 
without Senate participation and White House buy-in. And any findings from the 
effort could come during a presidential election year -- an unfavorable 
political climate for a proposal that is likely to ask for some sacrifice from 
the voting public.

   McCarthy said one thing he could do as speaker would be to bring up 
recommendations from the debt commission one at a time rather than in one fell 

   "I could do it kind of like in a BRAC," McCarthy said, referring to the 
various Base Realignment and Closure rounds initiated by the Defense Department 
to reduce excess infrastructure. "I could bring it directly to the floor, no 
amendments, you vote it up or vote it down and see what passed, see what 

   "You can do section by section so people don't get hung up on everything," 
he said.

   Rep. Steve Womack, R-Ark., said he likes the idea of a commission.

   "We need to get as much of the politics out of it as we can and just give us 
the facts," Womack said. "... And the facts are that 70% of this whole federal 
budget is on autopilot right now."

   Womack said he isn't calling for Congress to "cut a lot of these programs, 
but we do have to make these programs sustainable in the future."

   On the Senate side, Sen. John Thune, the No. 2-ranking Republican, gave the 
commission concept his endorsement, saying "we got to start taking this stuff 

   "I think that makes all the sense in the world. Let's get the best experts 
in the room and figure out what's the best way to fix these issues, make these 
programs sustainable and see if we can't do something to address deficits and 
debt in a meaningful way," Thune said.

   But Sen. Ron Wyden, the Democratic chair of the Senate Finance Committee, 
said he sees it as a way for Republicans to pursue "ideological trophies."

   "Everything I've heard about it, it's a prescription for trouble," Wyden 
said, adding, "They're looking at a glide path to reduce benefits."

   The most recent efforts to reduce deficits through the recommendations of a 
commission ended in failure.

   In 2010, there was the Simpson-Bowles commission, led by co-chairs Alan 
Simpson and Erskine Bowles. They drafted a plan that mixed painful cuts to 
safety-net programs with big tax increases even while cutting top rates on 
individuals and corporations to 28% from 35%. It also would have hiked Social 
Security's retirement age and scaled back popular tax deductions for health 
insurance and mortgage interest.

   The committee's recommendations gained the support of most of its members, 
but fell three votes short of the 14-vote threshold required to send the 
package to Congress for an up-or-down vote.

   Sen. Mike Crapo, R-Idaho, a member of the Simpson-Bowles panel, said the 
commission failed because a better mechanism was needed to ensure the 
recommendations were voted on by Congress. He said he continues to believe a 
commission is the best way to tee up for Congress the "tough political 
decisions" on the $31 trillion-plus debt.

   Following Simpson-Bowles, Congress approved legislation the next year that 
established a Joint Select Committee on Deficit Reduction. But the so-called 
"supercommittee" failed after two months of work to produce a deficit-cutting 
plan of at least $1.2 trillion.

   Part of the legislation establishing the supercommittee also put into place 
a backup plan -- the enactment of across-the-board cuts to both defense and 
non-defense programs should it fail. Those cuts eventually began in March 2013. 
But subsequent Congresses routinely blunted the impact of the automatic cuts by 
upping the limits on discretionary spending.

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