CHN: Deficit Reduction Commission Holds First Meeting

President Obama’s budget proposal for the coming year estimates that in 2015, spending will exceed revenues by $250 billion, not counting the cost of interest on the federal debt.  Seeking bipartisan support for a plan to eliminate that deficit, the President created the National Commission on Fiscal Responsibility and Reform on February 18 and charged it with that challenging task.  The Commission, co-chaired by Erskine Bowles (former chief of staff for President Clinton) and Alan Simpson (former Republican Senator from Wyoming), met for the first time on April 27.  They heard from Federal Reserve Board Chair Ben Bernanke and from Peter Orszag, head of the White House Office of Management and Budget.  Unsurprisingly, Commission members were advised that moving the federal budget towards balance would require a combination of spending reductions and revenue increases.  The Commission has until December 1 to come up with the details.
Commission members will meet on a monthly basis, with weekly meetings of working groups on taxes, mandatory spending, and discretionary spending.  (The Commission’s members and composition of the working groups are listed below.)  Recommendations they make to Congress must be supported by 14 out of the 18 members.  If such a majority is achieved, Congressional leaders have pledged to bring them to a vote.

Across the political spectrum, there is widespread agreement that the federal government ought to reduce its projected long-term deficit and debt.  Forging agreement on how to accomplish this is a lot more elusive.  Those on the right look to cut spending, especially in areas like Medicare and Social Security.  Moderates and progressives are more inclined to include revenue increases as part of the long-term solution, with progressives more interested in collecting revenues from upper-income and corporate sources.

If there were an attempt to eliminate the $250 billion deficit in 2015 by spending cuts alone, it would require a 6.8 percent across-the-board cut in every federal program, according to the Center for American Progress.  But certain programs would inevitably be cut less or not at all.  If Social Security were exempted, for example, all other programs would have to be cut 9 percent.  Efforts to spare services for veterans, military spending, or other programs will mean still greater cuts for everything else, including education, housing, nutrition, cash aid, job training, and other social services.  Human needs advocates will need to demonstrate that deep cuts in such programs will inflict untenable and unnecessary harm both on vulnerable people and on the economy.  Fair and adequate revenues, combined with progress in limiting the growth in health care costs affecting the entire economy, are seen by many economists and budget analysts as the largest contributors to solving long-term problems.

The work of the Fiscal Commission is seen by the Administration as helping to educate the public about the need for responsible and difficult choices.  However, the Commission has no funding to conduct regional hearings or to develop creative online strategies for public participation.  To fill the gap, private funders are stepping in to create educational forums.  The organization America Speaks has received funding to hold town meetings in at least 20 cities on June 26, at which participants will meet for more than 6 hours to develop a set of recommendations for deficit reduction.  Funding for this project comes from the Peter G. Peterson Foundation, the Kellogg Foundation, and the John D. and Catherine T. MacArthur Foundation.  Peterson has been criticized for emphasizing cuts in Social Security and Medicare as primary tools for deficit reduction.  Those recruited to design the town meeting content and to advise the project come from diverse points of view (including representatives from CHN and its members the Economic Policy Institute, National Council of La Raza, Center on Budget and Policy Priorities, Center for American Progress, and National Committee to Preserve Social Security and Medicare, as well as groups focused on spending cuts such as the Heritage Foundation, Cato Institute, and National Taxpayers Union), but whether participants and program design will be skewed towards spending cuts and away from revenue options is still unclear.

There will be an attempt to balance the groups convened on the 26th to reflect the population’s demographics, although some are skeptical of achieving real balance, because participants will not be paid and low-income, working people may find it difficult to take part.  To learn about the project, see the current list of cities and to sign up to participate or to host a town meeting:

The National Commission on Fiscal Responsibility and Reform
Erskine Bowles and Alan Simpson, Co-Chairs
Bruce Reed, Commission Executive Director

Other Presidential appointees:  David Cote (CEO, Honeywell), Ann Fudge (Former CEO, Young and Rubicam Brands), Alice Rivlin (Brookings Institution), Andy Stern (Former President, Service Employees International Union).

Senate Majority appointees:  Durbin (D-IL), Baucus (D-MT), and Conrad (D-ND).
Senate Minority appointees:  Gregg (R-NH), Coburn (R-OK), and Crapo (R-ID).
House Majority appointees:  Spratt (D-SC), Becerra (D-CA), and Schakowski (D-IL).
House Minority appointees:  Ryan (R-WI), Hensarling (R-TX), and Camp (R-MI).

Working Groups:
Tax:  Cote, Fudge, Stern, Baucus, Becerra, Camp, Conrad, Crapo, Durbin, Gregg.
Mandatory:  Rivlin, Stern, Baucus, Becerra, Camp, Coburn, Conrad, Crapo, Gregg, Hensarling, Ryan, Schakowski, Spratt.
Discretionary:  Cote, Fudge, Rivlin, Coburn, Durbin, Hensarling, Ryan, Schakowski, Spratt.

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