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Senators in both parties balk at President Obama's plan for deficit panel

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By Lori Montgomery
Washington Post Staff Writer
Friday, January 22, 2010

Key senators in both parties are resisting President Obama's bid to create a bipartisan commission to rein in soaring budget deficits, saying the White House has failed to deliver clear assurances that a presidentially appointed panel would have the power to force a deficit-reduction plan through Congress.

Vice President Biden, Treasury Secretary Timothy F. Geithner and White House budget director Peter Orszag went to the Capitol on Thursday to try to sell the idea to a group of moderate Democrats, who are threatening to block efforts to significantly raise the nation's debt limit if there is no plan to restrain future spending.

Far from signing on, however, the group pressed White House officials to endorse a competing proposal to create a budget commission by law, with explicit provisions to put its recommendations to a vote in the House and Senate before the end of this year.

"We can't let the government continue to run deficits of this magnitude," said Sen. Evan Bayh (Ind.), the only Democrat to vote last month against a short-term increase in the debt limit. "What I'm going to look for is real, credible, enforceable fiscal restraint."

Added Sen. Amy Klobuchar (D-Minn.): "We are unwavering in our support for a statutory commission."

Meanwhile, key Republicans said they would not serve on a presidentially appointed commission, arguing that the panel would do little more than provide political cover for Democrats trying to show voters they are taking action on the deficit in the run-up to this fall's congressional elections. They, too, urged Obama to back a statutory commission, calling it the only hope for truly bipartisan cooperation on the nation's dire budget problems.

"If the president wants to do this thing on a bipartisan basis, he should stand up and say so," said Sen. George V. Voinovich (R-Ohio), who said he would vote for a long-term increase in the debt limit if a statutory commission was part of the deal. "He should say, 'I know that I'm going to take heat from some of you conservative Republicans who don't want to raise taxes, and I know I'm going to take heat from a lot of the liberal groups that are afraid their sacred cows are going to be impacted. But you know what? We've run out of time.' "

The debate over the makeup of a budget commission comes less than a week before Obama is scheduled to deliver his first State of the Union address, an occasion the White House hopes to use to reassure voters that the administration is working to tackle budget deficits driven to record levels by the deepest recession in a generation. The deficit, which hit $1.4 trillion last year, is projected to be just as deep this year and to hover around $1 trillion for the next decade before soaring again.

A budget commission would have broad authority to reduce future deficits, by raising taxes or cutting spending on entitlement programs such as Social Security and Medicare. Under a tentative deal reached this week at the White House, the presidentially appointed panel would seek to cut the deficit to 3 percent of the size of the economy by 2015, a target that, by some estimates, would require about $500 billion in tax increases or spending cuts in that year alone.

As the budget gap has widened, the Treasury Department has been forced to increase borrowing and the nation's debt has soared to levels not seen since World War II. Treasury officials expect to hit the current cap on borrowing, set at $12.4 trillion, sometime next month. Democrats are trying to raise the cap by $1.9 trillion so the government can cover its bills through the rest of this year -- and so Democrats don't have to revisit the unpopular issue before facing voters in November.

But Senate leaders acknowledge that they don't have the votes for such a big increase without the moderate Democrats. Meanwhile, the moderates don't have the votes to push through a statutory budget commission without Obama's help.

House leaders and some influential senators adamantly oppose the idea of relinquishing budget authority to an external body. "We should vote against creating a commission that can take away many of the responsibilities that the Constitution gave to Congress," Senate Finance Committee Chairman Max Baucus (D-Mont.) said Thursday of a statutory panel.

That has left the Senate at an impasse. On Thursday, Senate leaders delayed a vote on a plan to create a statutory commission until next week, to give the White House additional time to work out the problem.

As a fallback strategy, Democrats could approve another short-term increase in the debt limit so the nation does not default on its obligations. But that would deprive Obama of the centerpiece of his deficit-reduction strategy -- and it would require Democratic lawmakers to schedule another vote on the debt limit in just a few months.

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