WASHINGTON (AP) — House Speaker Kevin McCarthy is poring over the history books and considering appointing a mix of lawmakers and business leaders as he lays the groundwork for a new commission to tackle the country’s growing debt the nation
McCarthy is fresh off his biggest political victory since becoming speaker in January. He got the White House to negotiate a bill that suspends the debt ceiling until January 2025, while producing projected $1.5 trillion in deficit savings over the next decade. But the legislation focused only on a portion of federal spending that occurs each year and excluded programs like Social Security, Medicare and Medicaid that account for the majority of government spending and are major drivers of the debt.
McCarthy has embraced the idea of establishing a new fiscal commission to find further deficit reduction. Although similar commissions have been successful in the past, the most recent ones did not gather enough support for Congress to accept 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 work best, some with members. And should I bring in some people from the outside so that you have some modern people in the business world who have taken companies and looked at them in a way to streamline and modernize for efficiency? McCarthy said. “I think that combination would work well, but right now I’m spending a lot of time on how to put it together.”
Many analysts say it will take a combination of spending cuts and tax increases to significantly change the country’s financial trajectory. But therein lies the problem: Many Republicans won’t accept 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 those red lines for the debt commission, McCarthy said he was currently focused on getting the structure of the commission right, but added that the revenue coming into government coffers, around of 19.2% of gross domestic product last year, is at the higher end of the 50-year average.
Democrats are treading carefully. “I’m not sure what he envisions, but I look forward to having that discussion,” said Minority Leader Hakeem Jeffries, DN.Y. “I have no idea what the contours of the commission would be, so it’s hard for me to comment up or down at this point.”
The landmines facing the commission are legion. Even if McCarthy can get something through the House, the committee’s influence would be diminished without Senate involvement 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 demand some sacrifice from the voting public.
McCarthy said one thing he could do as speaker would be to present the debt commission’s recommendations one at a time instead of all at once.
“I could do it like in a BRAC,” McCarthy said, referring to the various rounds of base closings and realignments initiated by the Defense Department to reduce excess infrastructure. “I could take it straight to the floor, without amendments, vote it up or down and see what happens, see what doesn’t.”
“You can do section by section so people don’t get stuck on the whole thing,” he said.
Rep. Steve Womack, R-Ark., said he likes the idea of a commission.
“We need to take as much of the politics out of it as possible and just give us the facts,” Womack said. “… And the facts are that 70 percent of this entire federal budget is on autopilot right now.”
Womack said he’s not asking Congress to “cut a lot of these programs, but we have to make these programs sustainable going forward.”
On the Senate side, Sen. John Thune, the No. 2 Republican, threw his support behind the commission’s concept, saying “we have to start taking these things on board.”
“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 problems, make these programs sustainable and see if we can’t do something to address the deficits and debt in a meaningful way,” Thune said.
But Sen. Ron Wyden, the Democratic chairman of the Senate Finance Committee, said he sees it as a way for Republicans to chase “ideological trophies.”
“Everything I’ve heard about it, it’s a prescription for trouble,” Wyden said, adding, “They’re looking for a slippery slope to cut benefits.”
More recent efforts to reduce deficits through a commission’s recommendations 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 hikes, even as they cut the top rates for individuals and businesses from 35 percent to 28 percent. It also would have raised the Social Security retirement age and reduced the popular tax deductions for health insurance and mortgage interest.
The committee’s recommendations won support from a majority of its members, but fell three votes short of the 14-vote threshold needed 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 recommendations were voted on by Congress. He said he continues to believe a commission is the best way to get Congress to make “difficult policy decisions” on the more than $31 trillion debt.
After Simpson-Bowles, Congress passed legislation the following 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 reduction plan of at least $1.2 trillion.
Part of the legislation establishing the supercommittee also put in place a backup plan: the enactment of across-the-board cuts to both defense and non-defense programs should it fail. Those cuts finally began in March 2013. But subsequent Congresses have typically lessened the impact of the automatic cuts by raising limits on discretionary spending.
