–Co-Chair of Deficit Panel Hints That Progress is Occuring in Panel
–Former White House Chief Bowles Outlines $3.9 Trillion Compromise

By John Shaw

WASHINGTON (MNI) – As Congress’s Joint Select Committee on Deficit
Reduction — the Super Committee — ended its three-hour hearing
Tuesday, Rep. Jeb Hensarling, the Republican co-chairman, said that
reports that the panel is stalemated should be taken with a grain of
salt.

“Don’t necessarily believe everything you read and hear about the
proceedings of this committee,” Hensarling said.

There have been numerous recent reports that the panel is deeply
stalemated and may not reach an agreement by its Nov. 23 deadline.

Just prior to Hensarling’s remarks, former White House chief of
staff Erskine Bowles sketched out a possible agreement that the panel
could embrace.

Bowles said that based on reviewing comments from both parties, he
could envision a plan that calls for $300 billion in additional
discretionary savings, $600 billion in health care savings, $300 billion
in other entitlement savings, $200 billion by adopting the chained CPI,
$800 billion in additional revenues and $400 billion in debt service
savings.

Bowles said that this $2.6 trillion in savings when coupled with
$1.3 trillion in savings already achieved by earlier budget actions this
year on the debt ceiling and spending bills would result in $3.9
trillion in overall savings over a decade.

Savings of this level, he said, would “create a lot of excitement
with people in the country” and would “go a long ways toward building up
confidence that we could stand up to our problems.”

Bowles’ hopeful conclusion to the hearing was a striking bookend to
his sobering assessment at the start of the hearing.

As the hearing began, he praised the 12 members of the deficit
panel as serious lawmakers, but added that “collectively, I’m worried
you will fail the country.”

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.

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

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