–Simpson-Bowles, Domenici-Rivlin Fear Failure of Deficit Panel
–Sen. Murray: Panel Entering ‘Critical, Final Phase’ of Deliberations

By John Shaw

WASHINGTON (MNI) – Congress’ deficit reduction panel received
stern, even bracing, testimony Tuesday from leaders of past deficit
reduction commissions who said the U.S. faces a fiscal crisis unless a
large and carefully crafted deficit reduction plan is developed and
approved soon.

Former White House chief of staff Erskine Bowles and former senator
Alan Simpson warned the panel that “time is not on our side and we can
truly can no longer afford to wait.”

“The longer we put these choices off, the more difficult and
potentially harmful they become,” they said in a joint statement.

“We simply cannot delay these difficult choices anymore. Our great
Nation’s fiscal house is now made out of straw and any significant blow
— an oil shock, a collapse in Europe — can blow our house down. This
is certainly no way for such a great country to exist,” they added.

Bowles and Simpson said the final package should have $4 trillion
in 10-year deficit reduction at a “minimum.”

Bowles said while he respects all of the 12 members of the special
deficit panel “collectively I’m worried you will fail the country.”

In their testimony, former Senate Budget Committee Chairman Pete
Domenici and for White House budget director Alice Rivlin, agreed that
the new deficit panel must find budget savings that goes “well beyond”
the $1.5 trillion goal set by the debt ceiling agreement last summer.

“We believe you should craft a grand bargain involving structural
entitlement and tax reform that would save at least $4 trillion over 10
years,” they said in a statement.

Domenici and Rivlin said the panel should also include a stimulus
plan in their final package, suggesting a year-long payroll tax holiday
for both employers and employees would be very helpful.

The co-chairs of the congressional deficit panel, Sen. Patty Murray
and Rep. Jeb Hensarling, said they are fully aware that the committee
faces a daunting challenge in less than a month.

Murray said the panel is now entering a “critical, final phase” and
must craft an agreement in the coming weeks. The final deal must be
“balanced” and included spending cuts and revenue increases.

She said both parties must now “come out of their partisan and
ideological corners” and enter tough negotiations.

Hensarling said the final package should focus on “fundamental and
structural reform of our entitlement programs.”

The Joint Select Committee on Deficit Reduction is charged to
submit 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.

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

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

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