By: Arley Johnson
Capitol Hill is filled with anticipation to see what suggestions the joint deficit reduction “Super” committee comes up with in negotiations to address our budget and deficit problems. Committee members have been holding intense meetings trying to finalize a plan to save at least $1.2 trillion over the next decade.
Republicans outlined their plan behind closed doors last Wednesday, one day after details of a $3 trillion Democratic proposal was released. Details of the GOP plan were minimal, but it would rely largely on spending cuts and other non-tax revenue to exceed the savings mandate. In part, the GOP plan is aimed at drawing contrasts with the Democratic plan, which would seek an equal mix of tax increases and spending cuts – including $500 million in Medicare and Medicaid reductions – to meet its mark. Neither plan could garner enough votes to pass the committee, but there are some signs in each that show progress is being made among the committee’s 12 members on tough issues. Both proposals take a “go big” approach and target savings upward of $2 trillion. Democrats are at least willing to consider cuts to entitlements, and the GOP does not appear to have completely ruled out a corporate tax overhaul. As panel co-chairman Jeb Hensarling, R – Texas, told reporters as he shuffled in and out of a session, “We continue to have fruitful discussions and make progress.”
During a public hearing with the committee, Congressional Budget Office Director Douglas W. Elmendorf warned that caps on discretionary spending in the August debt deal could make it challenging for lawmakers to find more savings through cuts. He said those caps on both defense and non-defense discretionary spending would save $778 billion over the next decade and keep those levels below the rate of inflation. With caps set lower than inflation, Elmendorf said, there will have to be deductions in the “real inflation-adjusted resources available for the government’s programs – even if there are no additional discretionary reductions. He added that the impact of the caps will be felt most heavily by programs rising at a rate faster than inflation, such as defense, veterans’ health care and Pell grants for higher education.
Source: CQ Budget Tracker.