Skip to main content

Deficit commission gets a tighter deadline than expected

By the CNN Wire Staff
STORY HIGHLIGHTS
  • The panel has a November 23 deadline to agree on $1.5 trillion in deficit reduction steps
  • An expert says the plan must be worked out by early November to leave time for analysis
  • A hostile political environment raises doubts about the panel's ability to succeed

Washington (CNN) -- A special congressional committee charged with forging a deficit reduction deal by Thanksgiving has to make final decisions weeks earlier in order to have time to analyze the plan's cost and draft it into legislation, the head of the Congressional Budget Office said Tuesday.

Doug Elmendorf, who directs the nonpartisan CBO that provides authoritative analyses of legislation, told the panel an agreement must be reached by the beginning of November to leave enough time for the "scoring" of the measure by the November 23 deadline.

Elmendorf was the first witness to testify before the 12-member Joint Select Committee on Deficit Reduction created under the August debt ceiling agreement. The panel must draft a $1.5 trillion deficit reduction plan that can win congressional approval, or more than $1 trillion in across-the-board spending cuts will go into effect under the debt ceiling deal.

President Barack Obama wants the committee to go bigger and proposed this week that it expand its target to pay for his freshly unveiled $447-billion jobs plan. The president continues to seek a so-called "grand bargain" on deficit reduction that would take a comprehensive approach by reforming the tax code and entitlement programs to raise revenue, cut costs and lower spending.

On Tuesday, party leaders in the House also said a larger deal would be preferred.

"I've always believed that we should tackle as much of our debt problem as is possible," said House Speaker John Boehner, R-Ohio, who added: "I've always believed it would be easier to get the votes if in fact we got a big deal."

Rep. Steny Hoyer of Maryland, the No. 2 House Democrat, called for the deficit committee to double its targeted deficit reduction.

"Our target ought to be in the $4 trillion-plus category, not $1.5 trillion," Hoyer said. "That will require courage."

With economic recovery slowed, unemployment high and a re-election campaign starting, Obama is trying to spur growth now while getting Congress to pass a long-term plan to reduce budget deficits and the national debt.

Elmendorf told the committee on Tuesday that achieving "a short-term economic boost and longer-term fiscal sustainability" would require a combination of policies that would change taxes and spending to widen the deficit now and narrow it later this decade.

Republicans, however, are pushing for a strategy that shrinks the size of government through spending cuts, deregulation, entitlement reforms and tax cuts. In particular, increasing the deficit in any manner is opposed by tea party conservatives, who have exerted their influence on Republican politics for the past two years.

In his testimony, Elmendorf said the current trajectory of U.S. debt will be unsustainable in coming decades, and that entitlement programs such as Social Security and Medicare will be "much more expensive than they've been in the past because there will be more people collecting benefits and each person will be collecting more in benefits."

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 $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.

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.

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 in August.

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.

Under the legislation that created 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 -- which cannot be amended -- would then need a simple majority in each chamber of Congress to make it to Obama's desk.

CNN's Deirdre Walsh and Tom Cohen contributed to this report.

 
Quick Job Search