–Sen. Murray: Seek ‘Balanced and Bipartisan’ Deficit Cut Plan
–Sen. Murray: ‘Confident We’re Making Progress’ On Deficit Deal
–Rep. Hensarling: Must Focus on ‘Structural’ Entitlement Reforms
–Rep. Rep. Hensarling: Need $1.5 Trillion Deficit Cut Plan

By John Shaw

WASHINGTON (MNI) – The co-chairmen of Congress’s special committee
on deficit reduction agreed Wednesday that controlling the nation’s
large deficits and growing debt requires policies that go far beyond
additional controls on discretionary spending.

In a hearing with Congressional Budget Office Director Doug
Elmendorf, the panel’s co-chairs, Democratic senator Patty Murray and
Republican congressman Rep. Jeb Hensarling, argued that additional
reductions in discretionary spending won’t fix the nation’s fiscal woes.

Murray said that non-defense discretionary spending represents only
one-fifth of the federal budget, but has been the most popular source of
deficit cuts in recent years.

“Congress has gone back to this relatively small pot with cuts and
spending caps again and again–while leaving many other pieces of the
budget essentially untouched,” Murray said.

Murray said deficit panel continues to work for a “balanced and
bipartisan plan that can pass through Congress and get signed into law.”

She said the panel must make “tough decisions and real
compromises.”

“We aren’t there yet, but I’m confident we are making progress. And
I’m hopeful we’re moving quickly enough to meet our rapidly-approaching
deadline,” she said.

Hensarling said the discretionary portion of the federal budget is
“40% and shrinking” while the mandatory part of the budget is “60% and
growing.”

He said the deficit panel should craft a reduction plan that
produces at least $1.5 trillion of savings and also makes “structural”
policy changes so the long-term deficit and debt is brought under
control.

Hensarling said reforming federal health care programs is
especially critical to “solving the structural debt crisis.”

CBO Chief Elmendorf outlined basic budget trends in his remarks. He
said discretionary spending in fiscal year 2011 will total about $1.35
trillion, about 40% of federal spending. Slightly more than half of
this spending was for defense programs, he said.

Elmendorf said that lawmakers have “already taken significant steps
to constrain discretionary spending,” including in this past summer’s
debt limit agreement.

Congress’s 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.

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

Budget experts have said the deficit reduction panel needs to
submit its recommendations to the Congressional Budget Office by early
November so it can score the package by Nov. 23.

The deficit reduction panel has held only three other 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’s Joint
Tax Committee.

The deficit reduction 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.

In the last several weeks, 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 might provide 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.

There have been reports that Senate Finance Committee Chairman Max
Baucus has floated a plan that calls for about $3 trillion in deficit
reduction over a decade with a nearly equal blend of spending cuts and
tax increases.

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

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