Deficit panel doubtful discretionary cuts will make dent
WASHINGTON -- The congressional "supercommittee" seemed skeptical that discretionary budget cuts could do much to help meet their $1.5 trillion deficit-reduction goal, even as they held a rare public hearing Wednesday to discuss the 40% of the budget that goes to non-entitlement spending.
"There's no such thing as an unimportant hearing when it comes to dealing with our nation's debt crisis," said Rep. Jeb Hensarling, R-Texas, the panel's co-chairman. He was quick to add, "We may be debating the pennies, nickels and dimes in a debt crisis that is demanding half-dollars and dollar bills."
Sen. Patty Murray, D-Wash., the committee's co-chair, noted that less than one-fifth of the budget goes to non-defense discretionary spending. "But listening to the debates here in D.C. over the past few months, you would think this small piece of the pie was a whole lot bigger."
Discretionary spending — the spending Congress authorizes each year — accounts for $1.3trillion a year, Congressional Budget Office Director Doug Elmendorf told the Joint Select Committee.
Mandatory spending — programs such as Medicare and Social Security — is the larger and faster-growing share of spending, about $2.1 trillion a year.
Under the terms of the debt-limit deal reached in August, the committee has until Nov. 23 to reach its goal of $1.5 trillion in deficit reduction, either through discretionary cuts, entitlement savings or tax increases. If they don't reach at least $1.2 trillion, automatic cuts would kick in, with half to domestic programs and half to defense.
More than a month since the committee had last met in public, Wednesday's hearing provided a few insights into the closed-door negotiations:
•Rep. Dave Camp, R-Mich., asked whether there was anything to prevent Congress from changing the terms of the August deal to protect defense from automatic cuts. "No," Elmendorf said.
•Sen. Jon Kyl, R-Ariz., wanted to know whether any savings from President Obama's plan to withdraw troops from Iraq could be counted as part of the spending cuts. "I don't know," Elmendorf said.
•Sen. Max Baucus, D-Mont., asked whether Congress could get around defense spending caps by moving defense spending to the war account known as "overseas contingency operations." "I think that's up to the Congress," Elmendorf said.
•Sen. John Kerry, D-Mass., pushed the argument for "going big" by reaching a $4trillion target — and using tax increases on the wealthy to do it. "Which would have the greater negative impact on our economy," he asked, "finding some revenue from those folks and getting a deal or having no deal and not having that revenue?"
"The more that this committee can achieve, over some period of time, the better that would be for current confidence," Elmendorf said.
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