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House, Senate on different tracks in deficit, debt-limit plans

This article first appeared in the St. Louis Beacon, July 20, 2011 - WASHINGTON - Moving on separate tracks toward the same debt-limit deadline, the U.S. House adopted a Republican "cut, cap and balance" debt-reduction plan late Tuesday while a bipartisan Senate group got encouragement from the White House and many senators for a "Gang of Six" plan.

With the controversial "cut, cap and balance" plan facing an uphill battle in the Senate, attention on Capitol Hill was focusing on the potential of the "Gang" approach -- a proposal by U.S. Sen. Dick Durbin, D-Ill., and five other senators modeled on parts of the bipartisan Bowles-Simpson deficit-reduction report. Besides Durbin, the other senators are Tom Coburn, R-Okla., Mike Crapo, R-Idaho, Saxby Chambliss, R-Ga., Kent Conrad, D-N.D., Mark Warner, D-Va.

The overall goal was to come up with a plan that could be approved by Congress and sent to President Barack Obama before the Aug. 2 deadline to raise the debt limit. On Tuesday, the long-winded and highly partisan House debate before the 234-190 vote pitted Republicans who demanded sharp budget cuts and a balanced-budget amendment against Democrats who warned that the plan would devastate seniors and eviscerate many government programs.

U.S. Rep. Todd Akin, R-Wildwood, a cosponsor of the Republican legislation, said it would reduce total federal spending by $111 billion in the fiscal year that begins Oct. 1, would cap spending to a percentage of gross domestic product and would require congressional approval of a balanced budget amendment to the U.S. Constitution before the nation's debt limit could be increased.

"Increasingly, I am hearing from my constituents an unwillingness to grant Congress and the administration a multi-trillion dollar increase in the nation's credit card limit," Akin said in a statement. "We need a change in course in Washington that brings us back on a path of fiscal health." 

But Rep. William Lacy Clay, D-St. Louis, said, "This GOP Tea Party legislation would take a chain saw to Medicare, Social Security, Medicaid, job training, community health care and many other essential priorities for the working families of this country."

Clay concluded, "It is total nonsense, a complete waste of time and tax dollars, and totally irresponsible."

Reflecting a similar view, Rep. Russ Carnahan, D-St. Louis, told reporters that the "cut, cap" approach was "a gimmick to put severe and draconian cuts in place, not just in law but in our Constitution. It is also a gimmick to end Medicare as we know it and would require in the future a two-thirds vote in order to pass any additional revenues, but only a majority vote to do things like cut benefits for seniors."

The moves in Congress were occurring as new surveys showed a shift in public attitudes. A Wall Street Journal/NBC News poll found that 38 percent of Americans now say the debt ceiling should be raised, versus 31 percent who believe it should not. The poll numbers had been reversed a month earlier.

Asked who they would blame if the debt limit is not raised by the deadline and the government defaults, those surveyed spread the blame: 39 percent said they would blame Republicans in Congress; 35 percent would blame Obama and Democrats in Congress; and 17 percent would spread the blame equally.

'Gang of 6' Approach Wins Converts

While the House was debating, many senators and White House officials were examining the outline of a Gang of Six proposal that would offer an estimated $3.7 trillion in budget savings over 10 years. 

Obama told reporters that, based on an outline of the plan, "the framework is broadly consistent with what we've been working on here in the White House and with the presentations that I've made to the leadership when they've come over here."

Under the plan's outline, about three-quarters of the deficit reduction would come from spending cuts and about a quarter from closing loopholes or new taxes. The proposal would impose spending cuts and caps and require congressional committees to reduce the annual deficit by specific levels in their areas of jurisdiction -- probably including some adjustments in Medicare and Medicaid. The gang also proposes eliminating many tax deductions and breaks and lowering personal and corporate tax rates.

The gang's suggestions include many recommendations made in December by the National Commission on Fiscal Responsibility and Reform. The co-chair of that commission, former Republican Sen. Alan Simpson of Wyoming, told the Beacon last week that congressional failure to raise the debt limit and approve a significant deficit-reduction plan would lead to serious economic consequences and a backlash from disgruntled voters.

Durbin said he was delighted by what appeared to be progress. "It is a significant moment in our history that 49 senators -- Republicans and Democrats -- came together this morning and felt positive about a bipartisan plan to reduce our deficit," Durbin said Tuesday. "But we don't have much time left to get down to business and extend the debt ceiling. We cannot let interest rates go up and kill the recovery that's taking place in this economy by killing jobs. We need to solve this problem on a bipartisan basis; we need to extend the debt ceiling."

Among the senators who attended the morning briefing was Sen. Claire McCaskill, D-Mo., who said afterward that she was impressed by the bipartisan spirit there in discussing and trying to tackle a difficult challenge.

"It's a refreshing thing to have folks of all stripes sit down together, put politics aside and work toward some common-sense solutions," McCaskill said in a statement. "The devil will be in the details, but today's meeting gave me new hope that we'll be able to pass a responsible plan to cut spending and avoid a job-killing government default, all while protecting Social Security and Medicare."

Sharp Partisan Split on House Vote

The House vote on "cut, cap" went almost entirely along partisan lines, with most of the Republicans who voted against saying that they would oppose any legislation that would allow an increase in the debt ceiling.

The proposal would cut spending by $111 billion in 2012 and cap future outlays to 19.9 percent of the nation's gross domestic output. It also would require that Congress approve a balanced-budget constitutional amendment, which would have to be ratified by the states -- a process that typically would take many years.

In a commentary in the Beacon, Akin complained about the $14.3 trillion national debt. He wrote that "Republicans were elected in large numbers in November 2010 because voters had faith we would stop the charade of politics as usual and actually fix the problem."

If Obama's 2012 budget proposal were adopted unchanged, Akin said, "the federal debt would increase from approximately $10 trillion on the day he was inaugurated to $20 trillion by the end of his potential second term."

But Democrats argued that the "cut, cap" approach would demand far too many sacrifices -- especially among the elderly -- and would preserve tax breaks for the rich.

Rep. Jerry Costello, D-Belleville, called the bill "a Republican gimmick, not a serious attempt to find common ground and a reasonable approach to getting our deficit and debt under control." He said he was prepared to back a "straightforward balanced budget amendment," but said the only way to balance the budget under the Republican plan "would be to dismantle programs that help seniors and the disabled, while tax breaks for the wealthiest Americans and corporations that ship jobs overseas are preserved."

Rep. John Shimkus, R-Collinsville, said it was important for the House to take a stand. "While the debt-limit negotiations are still ongoing, this bill provides a long-term approach to dealing with our federal budget problems," Shimkus said. "We do not have a revenue problem; we have a spending problem. This legislation tackles that spending problem."

Rep. Blaine Luetkemeyer, R-St. Elizabeth, an original cosponsor of the "cut, cap" bill, said Tuesday's vote represented "a victory for current and future generations of Americans." In a statement, he added: "With today's historic vote, we have the opportunity to finally reverse the financial burdens that have been placed on our children and grandchildren, reinvigorate our economy and demonstrate to markets and creditors at home and abroad that we are serious about tackling our country's debt."

Rep. Jo Ann Emerson, R-Cape Girardeau, said that none of the spending restrictions in the "cut, cap" bill apply to Social Security, Medicare, veterans benefits or paying interest on outstanding U.S. debt obligations.

"Even with a balanced budget and spending caps, we must choose priorities," Emerson said. "Medicare, Social Security, the promises we've made to our veterans and to our children have to be preserved. Believe me, there is a lot of money that can be saved in federal government without touching the programs we rely on most. Sometimes it requires a creative solution or combining two federal offices, but there are lots of ways to make a difference in the amount of taxpayer money we spend without touching Social Security or Medicare."

The next steps in the House and Senate were not clear. In a phone interview, Clay told the Beacon that he worried that the House speaker had "lost control" of many Republicans.

"We are only two weeks away from destroying the nation's AAA credit rating, throwing the world economy back into a recession, and devastating the value of every dollar," Clay said. "And yet, instead of acting like adults and doing what common sense requires, the House is wasting time with more GOP tea party theater."

Rob Koenig is an award-winning journalist and author. He worked at the STL Beacon until 2013.

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