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Tough Choices
Ahead
The first of three separate commissions tasked with
providing recommendations to Congress on how to reduce the national
budget deficit released its report today.
In its
"Getting Back in the Black" report, the Peterson-Pew Commission on Budget Reform focuses more
on congressional budget rules than cuts to specific federal
programs. By doing so, it would force lawmakers to set
long-term borrowing goals and create triggers that would
automatically enact painful spending cuts and tax increases if goals
were not met to reduce the deficit, taking the power to make those
decisions out of the hands of Congress should it fail to act.
"Transparency,
triggers and targets. That's sort of the key to our
report," said Bill Frenzel, a former
Ranking Member of the House Budget Committee.
The
Peterson-Pew Commission calls for the reduction of privately held
U.S. debt to 60 percent of gross domestic product (GDP) and setting
annual targets for spending and revenues. The tax writing
committees would be held to strict allocations like appropriations
committees currently are.
Should
Congress fail to meet its targets, automatic spending cuts to all
federal programs, including Social Security and Medicare, and tax
increases would occur. Congressional leaders and the
chairs of the appropriations and tax writing committees would also be
required to serve on the budget committees.
The
President's Commission on Fiscal Responsibility and Reform is required
to vote on and present its recommendations by December 1. 14 of
the 18 members of that commission must approve of a specific
recommendation for it to be included in the final report, leaving many
on both sides of the aisle skeptical that it can reach an agreement
on a comprehensive strategy for budget reforms, particularly with the
debate over extending expiring tax cuts looming.
There
is a general consensus among lawmakers that Congress will defer
action on any budget deficit reduction measures until the next vote
to increase the country's borrowing authority above the current limit
of $14.3 trillion will occur sometime next spring.
Nevertheless, current Senate Budget Committee Chairman Kent Conrad
(D-ND) has said that he may try to tie some of the commissions'
recommendations to tax cut extension legislation likely to be
discussed during the upcoming lame duck session.
The
President's Commission meets again today for its first post-election
session to receive official cost estimates for a range of ideas under
consideration, including raising the retirement age beyond 67 for
those born after 1960, cutting all discretionary spending, and
reducing the size of popular tax deductions available for interest
paid on home mortgages, employer-provided health care and charitable
contributions.
If you have
any questions concerning these issues, please contact Chris Wagner at
202.772.0924 or cwagner@clarkhill.com.
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