–Lawmakers May Be Forced To Shift From Platitudes To Particulars
–Keen Interest On Presidential Commission On Cutting Deficit
–Peterson-Pew Budget Report Calls For Specific Fiscal Targets

By John Shaw

WASHINGTON (MNI) – The surest way to generate applause on the
campaign trail is to offer a passionate committment to cut federal
spending.

Lawmakers from both parties have become adept at the sweeping
pledge to go after “wasteful Washington spending.” Almost everyone, in
the abstract, agrees that it is critical to put controls on federal
spending.

The problem is that there has been little agreement so far on what
specific programs to cut and how to cut them.

In post election interviews, victorious House Republicans have
discussed implementing across-the-board spending controls, but then have
said that huge chunks of the federal budget — Social Security, Medicare
and defense — would not be subject to these restraints. Their fiscal
comments have generated more derision than respect.

In the next several weeks, lawmakers from both parties will have
some specific deficit reduction packages placed before them, forcing
them to shift their commentary from lofty platitudes to nettlesome
fiscal particulars.

The most intense interest is on the final report from the National
Commission on Fiscal Responsibility and Reform which is chaired by
former Sen. Alan Simpson and former White House Chief of Staff
Erskine Bowles.

This panel includes the chairmen and ranking members of the Senate
and House Budget committees, the chairman of the Senate Finance
Committee and a former White House budget director and vice chairman of
the Federal Reserve Board. It includes some of the fiercest partisans of
recent budget battles, including five congressional Republicans who
appear to believe that tax increases should be off the table for fixing
the U.S.’s fiscal challenges and several Democrats who say that all key
social programs should be kept off limits.

President Obama created the commission on Feb. 18 by executive
order after an attempt by lawmakers to create a panel by statute failed
in the Senate.

The commission is charged to issue a report by Dec. 1 that would
cut the deficit to about 3% of gross domestic product by fiscal year
2015 and begin slowing the growth of debt over the long term.

In order for the panel to issue recommendations, 14 of the 18
members need to reach an agreement.

Analysts say the odds are long that this panel will be able to
issue a report with specific recommendations.

Senate Budget Committee Chairman Kent Conrad, a member of the
panel, told reporters Tuesday that it will be “very difficult” for the
commission to reach an agreement on a sweeping deficit reduction plan.

But he said that an agreement by the panel would be an important
step toward getting American fiscal policy back on track and winning
confidence of global markets.

“This is a defining moment for the country,” he said at a briefing
on fiscal issues that was hosted by the Peterson Foundation.

Conrad said that the panel must go beyond a statement defining the
fiscal problem or offering a menu of options or a outlining a broad
framework. “This situation requires specifics,” he said.

In addition to the Bowles-Simpson commission, there are other
efforts underway to outline steps to shore up the nation’s weak fiscal
position.

The Peterson-Pew Commission on Budget Reform began working in
January, 2009. The panel of budget experts has been trying to outline a
bipartisan package of fiscal changes to tackle massive budget deficits.

This panel issued a report last December that called for
stabilizing the U.S. debt at 60% of GDP by 2018. It released a new
report Wednesday that recommends creating specific fiscal targets,
setting multi-year caps on spending and tax entitlements and
establishing budget triggers to keep fiscal plans on track.

The Bipartisan Policy Center has created a fiscal task force that
is chaired by former Senate Budget Committee Chairman Pete Domenici
and former White House director Alice Rivlin.

Domenici, who also attended the Peterson Foundation briefing
Tuesday, said the fiscal task force that he is co-chairing with Rivlin
will release its report next week. He said it will offer a plan that
blends spending cuts with revenue increases. “You’ve got to have some of
both,” he said.

Domenici said the U.S.’s grim fiscal situation threatens the
American way of life as seriously as did World War II. “This is war,” he
said.

“If we fail, we are headed for second-class status,” he said.

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

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