–Some Lawmakers Seek To ‘Go Big'; Others Want To Focus on $1.5T Goal
–Former Fed Chairman Greenspan Says $4T Savings Needed ‘At Minimum’
–House GOP Leader Cantor: Shouldn’t Be ‘Making Promises We Can’t Keep’

By John Shaw

WASHINGTON (MNI) – After two public meetings, it’s clear that
Congress’ Select Committee on Deficit Reduction is divided on one of the
most basic questions that it faces: how big should its ambitions be?

There are two basic schools of thought. Some lawmakers are hoping
the panel is hyper-ambitious and secures about $4 trillion in budget
savings while others want it to be “more realistic” and focus on the
panel’s statutory goal of finding $1.5 trillion in savings.

Sen. John Kerry, a Democratic member of the deficit panel, said
Tuesday that the panel should work for an aggressive deficit reduction
package.

“We need to ‘go big’ and reach savings of more than $1.5 trillion
to address long-term deficits. We need to ‘go long’ and address our
long-term budget issues. And most importantly, we need to ‘go smart’ and
address the budget without preconceived dogmas or political agendas,”
Kerry said.

Kerry was adopting the language used by more than 50 business
leaders and budget experts in their letter to the deficit panel this
week.

“As you begin your important work to reach a deficit reduction
agreement, we urge you to ‘go big’ and develop a large-scale debt
reduction package to stabilize the debt as a share of the economy,” the
letter says.

“We believe that a go big approach that goes well beyond the $1.5
trillion deficit reduction goal that the Committee has been charged with
and includes major reforms of entitlement programs and the tax code is
necessary to bring the debt down to a manageable and sustainable level,
improve the long-term fiscal imbalance, reassure markets, and restore
Americans’ faith in the political system,” the letter adds.

Former Federal Reserve Chairman Alan Greenspan told a congressional
panel Tuesday that Congress’ new deficit reduction panel should secure
$4 trillion in budget savings over a decade “at a minimum.”

But other lawmakers argue that given the limited time that the
panel has to work, it should focus on its mandated goal of $1.5 trillion
in savings.

Senate Minority Whip Jon Kyl has urged the panel to zero in on its
goal of $1.5 trillion in savings. “We have a lot of work to do in a very
short period of time, and it’s tedious work,” Kyl said Tuesday during
the panel’s second meeting.

“It will take us a lot of time to complete. And I have expressed a
little bit of frustration that we need to get moving and that job will
be harder than some people realize,” Kyl said.

Kyl has said that he doubts the deficit panel has the time or the
ability to craft fundamental reforms of entitlement programs or the tax
code, but should focus on incremental steps.

During the panel’s Tuesday’s hearing with Congressional Budget
Office director Doug Elmendorf, Kyl said he wants to focus on
eliminating inefficiencies and waste from Medicaid and Medicare rather
than trying to alter the structure of these programs.

Elmendorf said there is “no evidence” the savings that could be
achieved in these areas would produce savings that would even make
substantial inroads into achieving $1.5 trillion in savings.

At a briefing Monday, House Majority Leader Eric Cantor cautioned
that members of the deficit committee should try to achieve the
objectives set out for it in the founding statute.

Asked if a bolder approach might be preferable, Cantor said “we
ought not be engaging in making promises we can’t keep.”

“I’m very much for making sure that there will be success in this
Joint Select Committee. I think the risk of failure is something that is
unacceptable. We can’t accept that,” he said.

The Joint Select Committee on Deficit Reduction is charged to
submit a report to Congress by Nov. 23, 2011 that reduces the deficit by
$1.5 trillion between 2012 and 2021.

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.

The panel has not yet scheduled its next public week but members of
the panel have said quiet talks between members of the committee are
occurring.

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

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