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Budget hawks propose commission to control debt
December 9, 2009 / 7:36 PM / 8 years ago

Budget hawks propose commission to control debt

WASHINGTON (Reuters) - Senate budget hawks on Wednesday unveiled a proposal that aims to get the national debt under control by forming a bipartisan commission to make tough decisions that they do not trust Congress to make on its own.

The 18-member commission proposed by Democratic Senator Kent Conrad and Republican Senator Judd Gregg would weigh tax increases, spending cuts and other approaches needed to prevent the ballooning national debt -- currently at $12 trillion -- from compromising the United States’ long-term strength.

Congress used a similar approach to close U.S. military bases, often a painful political decision with significant impact on local economies.

Though the commission idea is unpopular with many top Democrats, backers may have enough leverage to attach it to legislation that Congress will have to pass in coming weeks to allow the government to keep issuing debt.

Congress will have to raise the $12.1 trillion debt limit by $1.5 trillion to cover the government’s borrowing needs through 2010, Conrad said. But the group’s strategy could backfire if the debt-limit increase is combined with other bills that lawmakers are less willing to hold hostage, such as a bill that funds the wars in Iraq and Afghanistan.

Conrad said the 27 senators who back the proposal, including lawmakers of both parties, have been negotiating with congressional leaders and the White House.

MOUNTING DEBT

The national debt has more than doubled since 2001, as President George W. Bush and Congress cut taxes while pursuing wars in Iraq and Afghanistan. The pace has accelerated in recent years, as both Bush and his successor President Barack Obama hiked government spending while tax revenues plunged amid the worst recession since the 1930s.

The government posted a record $1.4 trillion deficit in fiscal 2009 and large shortfalls are expected for much of the next decade.

The picture is expected to worsen in the coming years as retirement and healthcare costs for the elderly skyrocket.

The commission -- a tried-and-true Washington tactic for politicians to offload painful choices -- could make it easier for lawmakers to sign off on unpopular measures like trimming retirement spending or raising taxes to get the budget back into line.

“People around here have a tendency to worry about the next election more than the next generation,” said Democratic Senator Claire McCaskill, who backs the commission proposal.

The commission would consist of eight Democratic lawmakers and eight Republicans, plus the treasury secretary and another member of the Obama administration.

It would report its findings in the months after the November 2010 congressional elections, when lawmakers would presumably feel less short-term political pressure. Both houses of Congress would have to vote on whether to approve the proposals, but would not be permitted to amend them in any way.

The commission’s recommendations would need a 60-percent supermajority in each chamber to become law.

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