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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
swoop.
"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
doesn't."
"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
on."
"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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