Saturday 13 August 2011

Can the 'super' committee fix the budget

Polish-up the front bumper and put that car on a dealer's lot, as it's all ready to go -- the only question now is will Congress' new super committee achieve anything? Or will it get stuck in neutral?


House Minority Leader Nancy Pelosi, D-Calif., completed the membership of the new, 12-member, bipartisan super committee Thursday by naming the three House Democratic members, Rep. Xavier Becerra, Rep. James Clyburn, and Rep. Chris Van Hollen.


Pelosi added that she hopes the committee can achieve balance as part of its goal of reducing the deficit, sfgate.com reported Friday. Her bottom line is for a "grand bargain" that "reduces the deficit by addressing our entire budget" including implementing tax increases "while strengthening Medicare, Medicaid and Social Security" -- no benefit cuts in entitlements.


The Democrats are represented by Sens. John Kerry, D-Mass., Patty Murray, D-Wash., and Max Baucus, D-Mont., and Reps. James Clyburn, D-S.C., Chris Van Hollen, D-Md., and Xavier Becerra, D-Calif.


What can Americans expect from this high-profile committee charged with the awesome responsibility of trimming our deficit by $1.5 trillion? The skeptic in me says not much, but the hopeful optimist in me finds some grounds for cautious optimism.


First, the skeptical part. Half of the committee will consist of Republicans who have already pledged not to raise taxes. Indeed when Norquist, head of the anti-tax American for Tax Reform, learned of the GOP picks, he tweeted enthusiastically, "Boehner and McConnell appoint friends of taxpayers to the 'Debt Super Committee' your wallet is safe."


Two of the Republicans are Tea Party freshmen: Pat Toomey and Rob Portman. A surprise was the exclusion of budget-hawk Rep. Paul Ryan, R-Wis. Toomey and Portman, however, more than make up for Ryan's absence, at least from the Tea Party's perspective. Toomey and Portman are just as much budget hardliners as Ryan.


On the other side of the aisle, Kerry and Murray have both gone on record supporting the recommendations of the Bowles-Simpson commission, which include cutting discretionary spending, changing entitlement programs and reforming taxes. Murray also chairs the Democratic Senatorial Campaign Committee, which is responsible for raising cash for the 2012 senatorial candidates. According to the GOP, this makes her likely to try to use her committee membership to press for partisan advantage.


Baucus has a reputation for being a conservative Democrat, largely because of his role in the administration's health-care reform efforts in 2009, in which he helped to water down the president's bill in the hopes of attracting Republican votes that never showed up. Interestingly, Baucus opposed the Bowles-Simpson recommendations on grounds that they would turn Medicare into a voucher program, raise the retirement age of Social Security and cut health-care benefits for veterans.


Pelosi's choices reflect the liberal wing of the Democratic Party. Van Hollen, Clyburn and Becerra are known for their efforts to preserve government programs such as Medicare from the chopping block.


The broad outlines of a "grand bargain" might be seen by analyzing the political interests of the players. Half of the committee, the GOP members, is uninterested in raising revenues or repealing tax cuts for the wealthy. Two of the Democrats have signaled that they would be willing to consider spending cuts and entitlement changes. This indicates that there will probably be large cuts in discretionary spending. There will also probably be changes made to Social Security and Medicare, but the Democrats, particularly Baucus and the Democratic House members can be counted on to protect the core of those programs.


Given the essence of what has to be done -- cut $1.5 trillion in spending -- it is hard to see how that is possible without including defense expenditures. The GOP might be expected to dig in their heels here. However, Tea Party freshmen, Portman and Toomey, have indicated a willingness to consider Pentagon cuts. A wild card on the Democratic side is Sen. Murray, who represents Washington. With 80,000 Boeing employees in her state, it is highly unlikely she would push defense cuts too hard.


It is apparent that -- if taxes are off the table, entitlements are handled carefully and defense is protected from deep cuts -- what's left is the rest of discretionary spending, that is, education, health care and human services, to bear the bulk of the cuts.


However, not nearly enough savings can be had by concentrating on discretionary spending, even if defense spending were not protected and cuts were made fairly across the board. Hence, my skepticism.

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