–Congress’ Deficit Reduction Panel To Hear From CBO Chief Wednesday
–House Ways & Means Panel To Hold Tuesday Hearing On China
–House Ways & Means Chief Could Release A Draft Tax Plan This Week

By John Shaw

WASHINGTON (MNI) – After weeks of public silence, Congress’ new
deficit reduction panel will hold a rare public hearing this week, as
the panel hears from Congressional Budget Office Director Doug
Elmendorf.

Elmendorf will testify on discretionary spending trends Wednesday
at 10 a.m.

The session is unlikely to break new policy ground but may provide
some insights about what the panel is considering to achieve its deficit
reduction goals.

The Select Joint Committee on Deficit Reduction has held only three
public hearings so far: its organizational meeting on Sept. 8, a budget
overview hearing on Sept. 13 with Elmendorf and a revenue overview on
Sept. 22 with Thomas Barthold, the chief of staff of Congress’ Joint
Tax Committee.

The deficit committee received a private briefing last week from
the members of a bipartisan group of senators who have developed a
far-reaching deficit reduction plan.

The 12-person panel has been meeting several times a week in often
lengthy private sessions. Members have left those sessions tight-lipped,
saying nothing that offered even a hint about where the panel is headed.

Some Republican members of the panel, such as Sen. Jon Kyl, has
said the panel should focus on achieving the $1.2 trillion to $1.5
trillion deficit cutting goal.

Some lawmakers and outside groups have urged the panel to come up
with a $4 trillion deficit reduction plan over 10 years.

Analysts have said that the deficit reduction panel needs to submit
its recommendations to the CBO by early November so the CBO can score
the package by Nov. 23.

Speculation has been growing that the panel will announce a
two-step process with some specific deficit reduction identified by the
end of November and instructions given to key congressional committees
to come up with additional deficit reduction packages by the early
spring.

Congress’ Joint Select Committee on Deficit Reduction is charged
with submitting a report to Congress by Nov. 23, 2011 that reduces the
deficit by between $1.2 trillion and $1.5 trillion for the 2012 and 2021
period.

The final package, if one is agreed to by the majority of the
panel’s 12 members, must be voted on without amendment by the House and
Senate by Dec. 23, 2011.

If the panel fails to agree on a spending cut package or Congress
rejects its plan, a budget enforcement trigger would secure $1.2
trillion in budget savings through across-the-board cuts.

The cuts would be equally divided between defense and non-defense
programs but would exempt Social Security, Medicaid and low-income
programs.

With the members of the Senate back in their states this week, the
House will continue to discuss issues ranging from housing to tax reform
to the U.S-China economic relationship and the European debt crisis.

House Ways and Means Committee Chairman Dave Camp may release a
draft proposal this week to overhaul the U.S.’s international tax code.
This would be the first step in a lengthy tax reform process.

The House is expected to vote on a provision this week to repeal a
3% withholding requirement on government contractor payments. The Senate
voted last week on similar legislation and secured 57 votes, three less
than the requisite 60 votes.

The House Ways and Means Committee will hold a hearing Tuesday at
10 a.m. on U.S.-China economic relations, focusing on trade practices
and non-tariff barriers that make it difficult for U.S. companies to
compete in the Chinese market.

Camp has scheduled the hearing to broaden the congressional debate
on China from the Senate’s tight focus on China’s currency policies.

A subcommittee of the House Financial Services Committee will hold
a hearing Tuesday at 10 a.m. on the implications of the European debt
crisis. Charles Collyns, assistant Treasury secretary for international
finance, will testify.

Another subcommittee of the House Financial Services Committee will
hold a 2 p.m. hearing Tuesday on the oversight of the insurance
industry.

The full House Financial Services Committee will hold a Wednesday
mark up at 10 a.m. on several bills related to job creation and reducing
regulation.

A subcommittee of the House Foreign Affairs Committee will hold a
hearing Thursday at 2 p.m. on the implications of the European debt
crisis. Treasury’s Collyns will testify at this hearing as well.

** Market News International Washington Bureau: (202) 371-2121 **

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