“I’m at a loss to understand what the purpose is,” House Majority Leader Eric Cantor (R-Va.) said Thursday in an interview. He said Obama had not set a timeline for any decisions, although lawmakers from both parties are calling for some agreement on deficit reduction before the government reaches a limit in the coming months on how much money it can borrow.
Several members said it was unclear whether the commission, to be chaired by Vice President Biden, will become the source of a bipartisan deal on cutting the deficit or simply serve as a diversion while an agreement is quietly negotiated elsewhere. That’s what happened in December, when public talks on Capitol Hill over extending Bush-era tax cuts were a cover for back-door negotiations, led by Biden, that ultimately yielded a deal.
“Well, I guess we’ll have to ask the vice president the answer to that question. The jury’s still out,” said Rep. Chris Van Hollen (Md.), the top Democrat on the House Budget Committee.
Obama called for the commission last week during a long-awaited speech outlining a strategy for taming the nation’s borrowing. He proposed that each party in the House and Senate name four members, for a total of 16. White House officials had calculated that congressional leaders would find it easier to navigate the internal politics of their caucuses if there were a relatively large number of slots.
But congressional leaders rejected the plan, concluding that 16 members would be unwieldy. Instead, Senate and House Democrats are sending two lawmakers each and Republicans one senator and one House member.
An administration official familiar with the discussion said the exact number of members is not the main concern for the White House. “What matters is that it be bipartisan, bicameral,” said the official, requesting anonymity to discuss internal White House discussions.
The early disputes over the commission could be the result of jockeying for leverage ahead of negotiations. The two parties remain far apart and, within their own ranks, there are substantial divisions about how far to move to get a deal.
Republicans are pushing to attach an “enforceable” spending cap, in Cantor’s words, to legislation raising the government’s debt ceiling. More conservative Republicans are looking at a constitutional amendment requiring a balanced budget, but other Republicans are considering a proposal from Sens. Bob Corker (R-Tenn.) and Claire McCaskill (D-Mo.) that would eventually cap federal spending at about 20 percent of the country’s economic output.
House Democrats, Van Hollen said, think “there should not be linkage between any of these things and the debt ceiling.” Democrats want to raise the debt limit without linking this vote to specific spending cuts and then move on to the broader debt discussions, including their preference to increase taxes on those making more than $250,000.
At least three of the lawmakers named to the commission — Van Hollen and Sens. Max Baucus (D-Mont.) and Jon Kyl (R-Ariz.) — were part of the public tax-cut talks in December that were overtaken by secret negotiations.
An administration official said Thursday that, this time around, there are no side talks and that Obama remains committed to the Biden commission.
But there is already a group of six senators, three Democrats and three Republicans, who are working on their own to reach a deficit reduction deal. The “Gang of Six” could propose, possibly next month, a plan that includes deeper entitlement cuts than Democrats have ever supported and tax increases that previously have been anathema for Republicans.
Optimists in the administration say that each of the emerging proposals would trim $4 trillion or more from current deficit projections, with each side “aiming at the same dart board,” as one official said. Obama’s plan would get there in 12 years, including tax increases for the rich and cuts to the Pentagon budget; the House GOP plan would save $4.4 trillion in 10 years, largely by privatizing Medicare and turning Medicaid into a block grant program run by states.
The most pressing concern for the Biden commission is to determine what to do about the debt ceiling. The government needs to keep borrowing money to pay off other loans and meet its obligations. By July 8, the Treasury will run out of options and, without some agreement, begin defaulting. The administration wants to reach a deal quickly before concerns over a possible default start to roil financial markets.
In exchange for their support, Republicans are demanding spending caps. “Small measures with the hope for something bigger later doesn’t cut it,” Cantor said.
Democrats oppose proposals such as the Corker-McCaskill initiative, because it suggests tackling the deficit with spending cuts alone while ignoring ways to increase tax revenue.
“The focus has to be on the deficit,” Van Hollen said. “It has to focus on the spending side and the revenue side.”