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VOL. 35 | NO. 35 | Friday, September 2, 2011

Democrats want debt-cutting panel to address jobs

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WASHINGTON (AP) — Democrats on a special congressional debt-reduction supercommittee want it to include jobs creation as part of its work, a task that would complicate the newly created panel's already formidable assignment.

The bipartisan, 12-member committee was scheduled to hold its opening meeting Thursday, a session that was supposed to be limited to opening statements and approval of its rules. The initial meeting was expected to be far less rancorous than this summer's bitter partisan brawl over extending the federal debt ceiling, which ended with a deal between President Barack Obama and lawmakers that created the supercommittee.

The panel is charged with finding, by Thanksgiving, $1.5 trillion in savings over the next decade, no easy task given the capital's sharp partisan divisions. Democrats want to produce a mix of spending cuts and revenue increases. Republicans have insisted they would oppose tax increases, though some have indicated they might accept the closing of some tax loopholes.

"Failure is not an option," Senate Minority Leader Mitch McConnell, R-Ky., said Wednesday. He said congressional leaders have appointed serious lawmakers to the panel, "and we fully anticipate they will meet their goals. And we'll see whether they can even go beyond that."

Many in Washington, though, are pessimistic that the panel will take a serious bite out of the nation's enormous $14 trillion in accumulated debt, especially with next year's elections approaching. They note that Democrats are ardently against cuts in expensive benefits like Medicare while Republicans are adamantly against higher taxes — the two most plentiful sources of potential budget savings.

"Politically, there's not a lot of motivation on either side" to produce a major package, said Chris Krueger, a political analyst for the brokerage firm MF Global.

Some Democrats on the supercommittee, though, want it to go even further and address voters' angst over the nation's stubborn unemployment problem. With the government reporting that the economy essentially stopped generating jobs last month, next year's presidential and congressional elections are pressuring lawmakers to do something about it.

"It's part of recovery," said Senate Finance Committee Chairman Max Baucus, D-Mont., a supercommittee member who said in a brief interview that he wanted the panel to tackle job creation. "Growth will create revenue," which would help reduce the debt.

"I'm not saying it will be easy, but it should be addressed," he said.

Another supercommittee member, Sen. John Kerry, D-Mass., asked whether he wanted the panel to tackle job creation, said he "may lay out that thought" at Thursday's meeting.

"I don't think you can reduce the deficit of the country to the scope that we need to without growth" of the economy, he said.

A third Democrat on the special committee, Rep. James Clyburn, D-S.C., wrote an opinion essay this week in The Washington Post saying deficit reduction must have three components: jobs, cuts and revenue.

None of the Democrats specified what job creation program they might favor.

Part of that answer might come Thursday evening when Obama delivers an address on jobs to a joint session of Congress. He is expected to propose extending a reduction in the payroll tax that will otherwise expire, giving tax incentives to companies that hire the jobless and boosting spending on public works.

Republicans would be likely to oppose adding spending to the committee's debt-reduction effort.

House Ways and Means Committee Chairman Dave Camp, R-Mich., a supercommittee member, said debt reduction would create jobs because reducing the federal debt would help the economy grow.

"Overspending has really spooked the markets and made it more difficult for employers to have confidence to invest and hire people and create jobs," Camp said in an interview.

Under the debt ceiling agreement, which narrowly averted a potential federal default, Congress must approve at least $1.2 trillion in savings by Christmas. If it doesn't, the difference would be made up by automatic spending cuts, divided evenly among defense and many domestic programs.

Behind the scenes, the supercommittee's work has already begun. Republicans and Democrats each held closed-door, daylong strategy sessions on Wednesday. Boehner, R-Ohio, attended part of the GOP meeting, highlighting the importance of the panel's work.

Democratic aides to the House Ways and Means Committee have produced documents listing possible options for revenue increases and savings from health care programs, including many that were discussed in previous deficit-reduction talks.

The options, which a Ways and Means spokesman said have not been discussed by lawmakers, include various tax increases on the wealthy, oil companies and businesses that transfer some assets overseas, and savings from Medicare, including trimming reimbursements to health care providers and gradually raising the program's eligibility age to 67 — which the documents call "a radical departure from current policy."

Though he has no formal role in the supercommittee's work, Obama plans to soon give the lawmakers his own debt-reduction plans. White House spokesman Jay Carney said Wednesday that the president's ideas will be "bigger, in fact, than has been mandated for the supercommittee."

A second public meeting of the committee is set for next Tuesday, when the head of the nonpartisan Congressional Budget Office, Douglas Elmendorf, will explain how the government's debt got so huge.

The panel has six members each from the House and Senate, evenly divided by party.

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