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Special deficit committee holds its first meeting

By Tom Cohen, CNN
  • NEW: GOP Sen. Jon Kyl warns against further defense cuts
  • The committee co-chairs both emphasize there is hard work ahead
  • The panel has a November 23 deadline to agree on $1.5 trillion in deficit-reduction steps
  • Hostile political environment raises doubts about the panel's ability to succeed

Washington (CNN) -- Differing partisan perspectives were on display Thursday as a special congressional committee set up under last month's debt-ceiling agreement held its first meeting to begin forging a long-term deficit reduction plan.

Despite calls for compromise and bipartisan cooperation in the opening statements of panel members, Sen. Jon Kyl, R-Arizona, later said he might quit the committee if it considers any additional cuts in military spending beyond the $400 billion already agreed to in the measure to extend the debt ceiling.

"When we had our first meeting, the chairman asked, 'Well, what do we think about defense spending?' and I said, 'I'm off the committee if we're going to talk about further defense spending (cuts),' " Kyl told a luncheon event Thursday by conservative groups the American Enterprise Institute and the Heritage Foundation. "Defense should not have any additional cuts."

Kyl's comment showed the challenge facing the 12-member Joint Select Committee on Deficit Reduction, which has until November 23 -- which is 76 days from now -- to forge a $1.5 trillion deficit reduction plan that can win congressional approval.

Months of negotiations involving President Barack Obama and congressional leaders failed to come up with a comprehensive deal, leading to the last-minute debt-ceiling agreement in early August as the government faced the possibility of defaulting on its obligations. The same partisan divisions still exist, though the White House and some lawmakers say they hope pressure for a deal exerted by an increasingly frustrated and angry public will create a climate for compromise.

After Thursday's meeting, the committee co-chairs hailed what they called the panel's bipartisan commitment to success.

"I think the American public saw today that the members of this committee are serious," said Sen. Patty Murray, D-Washington, while fellow co-chair, Rep. Jeb Hensarling, R-Texas, said the American people were demanding progress.

"If there was ever a time that there was a greater bipartisan commitment to success, I don't know when it has been," Hensarling said.

The panel's inaugural proceedings were interrupted for a few minutes by chanting demonstrators who shouted for job creation in the hallway outside the meeting room. After a brief delay, members continued to deliver opening remarks over the clamor.

In opening statements, members of the panel -- six Democrats and six Republicans evenly divided between the House and Senate -- emphasized both the magnitude of the problem and the need to succeed in dealing with it.

"The needle on the gauge has now entered the red zone," Hensarling said of the danger facing the nation's long-term fiscal stability, later adding: "I will not sit idly by and watch the American dream disappear for my 9-year-old daughter and my 7-year-old son."

Hensarling cited the rising costs of the Medicare and Medicaid entitlement programs -- the government-run health care for senior citizens and the poor and disabled -- as the main drivers of the long-term debt issue.

"In order to succeed, I know this committee must be primarily about the business of saving and reforming social safety net programs that are not only failing many beneficiaries but going broke at the same time," he said.

Murray said the nation faced difficult problems before and overcame them through unified action. A workable compromise, she noted, would not be something that any individual panel member would have written on their own.

"This committee has the opportunity to show the American people we can still come together, put politics aside, and solve a problem that's plaguing our country," she said. "We each got into politics for a different reason, but I'm quite sure none of us come here to engage in the kind of petty bickering that has been dominating the discourse here in Washington recently."

Speaking before Kyl's later comment against any further cuts in military spending, Murray said: "That's why I've been so glad that as we have gotten this process off the ground over the last few weeks, committee members have refrained from drawing lines in the sand or carving out areas that can't be touched."

She added, "And as we move forward, I hope we can continue to not allow ourselves to be boxed in or pigeonholed by special interest groups or partisans or media or pundits and we are allowed the room to come to a balanced agreement."

At the hearing, panel members put all the key issues on the table, with Republicans calling for serious entitlement reforms and tax reform and Democrats urging a comprehensive package. Sen. Max Baucus, D-Montana, made a point of saying increased revenue must be part of the solution.

Republicans cited the need for a focused approach, with Kyl saying the panel must come up with a proposal by the end of October to provide enough time for the Congressional Budget Office to offer a cost analysis and for it to be presented to the public. Democrats, meanwhile, advocated a broad approach that addresses the mutually dependent issues of deficit reduction and economic growth.

If the bipartisan panel fails to reach agreement by November 23, or if Congress fails to pass its proposal by December 23, deep spending cuts will get triggered throughout the government, including the military.

The trigger mechanism would come on top of $900 billion in spending cuts -- including the $400 billion from the military -- already launched by the debt-ceiling agreement, providing what Obama and congressional leaders hope will be overwhelming motivation to reach a deal to avoid it.

Kyl's opposition to any further military cuts showed the sensitivity of the issue. Defense Secretary Leon Panetta has said that cuts in excess of the $400 billion already ordered would harm the nation's armed forces.

However, the hostile political environment in Washington has raised doubts that the committee can achieve success. National opinion polls show significant public dissatisfaction with Congress, especially Republicans, and White House spokesman Jay Carney said Wednesday that he expected a cooperative spirit after legislators heard such criticism from constituents during their summer recess.

Two panel members -- Sens. John Kerry, D-Massachusetts, and Rob Portman, R-Ohio -- urged the committee to go beyond the $1.5 trillion mandate and come up with a comprehensive, long-range plan to help ensure future fiscal stability. Others, including Hensarling, advocated a more focused approach, saying the panel would be unable to solve all the nation's deficit and debt problems in the time allotted.

Other committee members include Democratic Reps. James Clyburn of South Carolina, Xavier Becerra of California and Chris Van Hollen of Maryland as well as Republican Sen. Pat Toomey of Pennsylvania and Reps. Dave Camp and Fred Upton, both of Michigan.

Under the legislation creating the committee, a simple majority on the panel -- seven of 12 members -- is needed to approve whatever package it comes up with, meaning that it will take a lone member of either party to push something through by voting with the other side.

The committee's proposal would then need a simple majority in each chamber of Congress to make it to Obama's desk.

So far, committee members have reviewed deficit reduction work of the past few years, when a deficit reduction commission appointed by Obama and a group of six U.S. senators came up with similar plans calling for spending cuts, tax reform and changes to entitlement programs such as Social Security and Medicare. Obama also will make recommendations to the committee, White House officials have said.

"We don't need to reinvent the wheel here, but we have to put our shoulder to the wheel and find the political willpower to get this done," Kerry said.

Months of rancorous negotiations on deficit reduction have failed to resolve a fundamental dispute between Republicans and Democrats involving the size of government and whether to raise revenue while cutting spending.

Obama is pushing for a comprehensive plan that includes spending cuts, increased tax revenue and entitlement reforms, while Republicans seek to shrink government by proposing spending cuts and entitlement reforms without increased taxes.

An impasse over the tax revenue issue led to the debt-ceiling agreement, which imposed the initial round of spending cuts and set up the special committee to work out further deficit reduction. The agreement also enabled the federal debt ceiling to be increased through 2012, allowing the government to borrow what it needs to meet its obligations.

The brinkmanship of the negotiations, with uncertainty over whether the government might default if no deal was reached, was one reason that ratings agency Standard & Poor's downgraded the U.S. credit rating from AAA to AA-plus last month.

CNN's Larry Shaughnessy contributed to this report.