Speaker McCarthy eyes new commission to tackle nation's debt, but many Democrats are wary
- United States
House Speaker Kevin McCarthy is studying the history books and considering the appointment of a mix of lawmakers and business leaders as he lays the groundwork for a new commission to tackle the nation's growing debt.
McCarthy is fresh off his biggest political victory since becoming speaker in January.
He got the White House to negotiate on a bill that suspends the debt ceiling into January 2025 while also producing a projected USD 1.5 trillion in deficit savings over the coming decade.
But the legislation only focused on a sliver of the federal spending that occurs each year and excluded programs such as Social Security, Medicare and Medicaid that account for the majority of government spending and are the biggest drivers of the debt.
McCarthy has embraced the idea of establishing a new fiscal commission to find additional deficit reduction. While similar commissions have notched success in the past, the most recent ones failed to muster enough support for Congress to take up their recommendations.
The speaker has asked Rep. Garret Graves, R-La., to work with him on the issue, which follows Graves' work as one of the lead debt ceiling negotiators in talks with the White House.
“I'm studying different angles to see what would best work, some with members. And should I bring in some people from the outside so you have some modern people in the business world that have taken companies and looked at them in a way to streamline and modernise for efficiencies?” McCarthy said. “I think that combination would work well, but right now I'm spending a lot of time on how to put that together.” Many analysts say it will take a combination of spending cuts and tax hikes to meaningfully change the country's financial trajectory. But therein lies the problem: Many Republicans won't entertain tax increases of any kind, and many Democrats won't consider benefit cuts.
McCarthy refused to accept any tax increases as part of the debt ceiling talks.
And when asked if he had any such red lines for the debt commission, McCarthy said he currently is focused on getting the structure of the commission right, but added that the revenue coming into government coffers, about 19.2 per cent of gross domestic product last year, is at the high end of the 50-year average.
Democrats are treading warily. “I'm not sure what he envisions, but I look forward to having that discussion,” said Minority Leader Hakeem Jeffries, D-N.Y.
“I have no idea what the contours of the commission would even look like, so it's hard for me to comment up or down at this point.” The landmines confronting the commission are legion. Even if McCarthy can get something through the House, the commission's clout would be diminished without Senate participation and White House buy-in.
And any findings from the effort could come during a presidential election year — an unfavorable political climate for a proposal that is likely to ask for some sacrifice from the voting public.
McCarthy said one thing he could do as speaker would be to bring up recommendations from the debt commission one at a time rather than in one fell swoop.
“I could do it kind of like in a BRAC,'' McCarthy said, referring to the various Base Realignment and Closure rounds initiated by the Defense Department to reduce excess infrastructure. “I could bring it directly to the floor, no amendments, you vote it up or vote it down and see what passed, see what doesn't.” ''You can do section by section so people don't get hung up on everything,'' he said.
Rep. Steve Womack, R-Ark., said he likes the idea of a commission.
“We need to get as much of the politics out of it as we can and just give us the facts,” Womack said. “... And the facts are that 70 per cent of this whole federal budget is on autopilot right now.” Womack said he isn't calling for Congress to “cut a lot of these programs, but we do have to make these programs sustainable in the future.'' On the Senate side, Sen. John Thune, the No. 2-ranking Republican, gave the commission concept his endorsement, saying “we got to start taking this stuff on.” “I think that makes all the sense in the world. Let's get the best experts in the room and figure out what's the best way to fix these issues, make these programs sustainable and see if we can't do something to address deficits and debt in a meaningful way,'' Thune said.
But Sen. Ron Wyden, the Democratic chair of the Senate Finance Committee, said he sees it as a way for Republicans to pursue “ideological trophies.'' “Everything I've heard about it, it's a prescription for trouble,” Wyden said, adding, “They're looking at a glide path to reduce benefits.” The most recent efforts to reduce deficits through the recommendations of a commission ended in failure.
In 2010, there was the Simpson-Bowles commission, led by co-chairs Alan Simpson and Erskine Bowles. They drafted a plan that mixed painful cuts to safety-net programs with big tax increases even while cutting top rates on individuals and corporations to 28 per cent from 35 per cent. It also would have hiked Social Security's retirement age and scaled back popular tax deductions for health insurance and mortgage interest.
The committee's recommendations gained the support of most of its members, but fell three votes short of the 14-vote threshold required to send the package to Congress for an up-or-down vote.
Sen. Mike Crapo, R-Idaho, a member of the Simpson-Bowles panel, said the commission failed because a better mechanism was needed to ensure the recommendations were voted on by Congress. He said he continues to believe a commission is the best way to tee up for Congress the “tough political decisions'' on the USD 31 trillion-plus debt.
Following Simpson-Bowles, Congress approved legislation the next year that established a Joint Select Committee on Deficit Reduction. But the so-called “supercommittee” failed after two months of work to produce a deficit-cutting plan of at least USD 1.2 trillion.
Part of the legislation establishing the supercommittee also put into place a backup plan — the enactment of across-the-board cuts to both defense and non-defence programs should it fail. Those cuts eventually began in March 2013.
But subsequent Congresses routinely blunted the impact of the automatic cuts by upping the limits on discretionary spending.
(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)