Deficit-Cutting Plan Fails to Advance to Capitol Hill

December 3, 2010 - 12:51 PM

Washington (AP) - An austere deficit-cutting plan by President Barack Obama's budget commission fell short of the necessary votes Friday for swift consideration by Congress.

But commission members said that by winning over an 11-7 majority on the panel for its blueprint, they had defied expectations. They said it showed that Washington politicians of both the Democratic and Republican parties could have an "adult conversation" about the painful choices required to avert a European-style debt crisis.

Devout Senate conservatives Mike Crapo, R-Idaho, and Tom Coburn, R-Okla., joined with close Obama allies Sens. Dick Durbin, D-Ill., and Kent Conrad, D-N.D., in support of the failed plan. Panel members said the commission's work had fundamentally changed the national debate on the deficit

The plan received "aye" votes from five of six senators who served on the 18-member panel, chaired by former White House chief of staff Erskine Bowles and former Wyoming GOP Sen. Alan Simpson.

But five of six House lawmakers on the panel voted "nay" and killed the plan, which would slash $4 trillion from the budget over the coming decade through a combination of tax increases and painful spending cuts -- including a hike in the Social Security retirement age and lower cost-of-living increases for the program.

"The Bowles-Simpson plan further erodes the middle class and threatens low-income Americans," said Rep. Jan Schakowsky, D-Ill.

Rep. John Spratt Jr., D-S.C. -- who lost a re-election bid last month -- was the only House member to endorse the plan, but quipped, "Thank God I'm not running again." That registered, especially, with Conrad, who faces a potentially difficult re-election bid in deeply Republican North Dakota.

"We have changed the issue from whether there should even be a fiscal plan for this country to 'what is the best fiscal plan for this country,' " said former Service Employees Union International president Andy Stern, who opposed the plan but praised its goals. "And that is an enormous tectonic paradigm shift," he added.

Among its many contentious provisions, the plan would raise the Social Security retirement age and scale back popular tax deductions on health insurance and mortgage interest.

Bowles and Simpson have labored on the deficit issue for months, keeping all but the most partisan members involved in the commission's work. Gaining the support of Durbin, a key Obama ally, was a major development.

"Today, with my vote, I'm claiming a seat at the table," Durbin said, adding that he saw the measure more as a starting point for next year's debate.

But all three House Republicans on the panel voted against the plan, as did liberal Democrats Schakowsky and Xavier Becerra of California. So did Senate Finance Committee Chairman Max Baucus, D-Mont.

Durbin raised eyebrows Wednesday when he endorsed gradually raising the full Social Security retirement age from 67 to 69 over the next 65 years, and he resisted heavy pressure from labor unions and others in backing the plan.

Besides increasing the Social Security retirement age, the plan calls for reducing future increases to benefits in order to help control federal spending. It would eliminate or scale back tax breaks -- including the child tax credit, mortgage interest deduction and deduction claimed by employers who provide health insurance -- in exchange for rate cuts on corporate and income taxes. It would raise the federal gasoline tax 15 cents a gallon to fund transportation programs.

The plan, which was unveiled Wednesday, elicited catcalls from advocates on the left -- over cuts to Social Security and other programs -- and conservatives who oppose its estimated $1 trillion or so in higher tax revenues over the coming decade.

Simpson warned those panelists who are elected members of Congress that they will face "slash and burn" tactics from the "zealots and their minions."

"But remember this, many of them were the same cynics who chuckled and broke out the champagne when we bagan our work," Simpson said. "And they ain't laughing now."

Baucus announced Thursday he couldn't support it. He said the plan "would cut pensions for military members, lower Social Security payments, raise the retirement age and limit Medicare benefits."