In a well-timed hearing, members of the Senate Finance Committee heard advice from federal budget wonks Tuesday morning on how to reduce the deficit — even as Congress remains consumed by debates over how and whether to raise the federal debt ceiling.
One week from now, lawmakers must either raise the debt ceiling or leave the federal government unable to pay its bills. Negotiations continue to flounder as party leaders disagree on whether to include tax increases proposed by Democrats or deeper, Republican-backed budget cuts in a final plan.
A plan proposed over the weekend by House Speaker John Boehner would cut $1.2 trillion in spending over the next 10 years and raise the debt ceiling by $1 trillion, requiring lawmakers to take up the issue again in early 2012. The plan calls for lawmakers to cut another $1.6 trillion to $1.8 trillion next year.
Robert Greenstein, president of the Center on Budget and Policy Priorities, gave the Boehner plan a thumbs-down.
“We run a much greater risk of default six months from now when we’ll be in a much more polarized political atmosphere than we already are,” he told lawmakers at Tuesday’s hearing.
Chris Edwards of the Cato Institute gave the speaker’s plan a more qualified response, saying it was better than a plan backed by President Obama and Senate Majority Leader Harry Reid. That plan would raise the debt ceiling enough to carry the government past the 2012 elections and includes $2.7 trillion in spending cuts.
But Mr. Edwards said neither plan enacts enough spending cuts long-term.
“The reality is there is not a one-shot deal here,” Mr. Edwards said. “Even aside from the debt-limit debate, we’re going to be fighting over 2012 appropriations, 2013 appropriations. We’ve got to reform every year for many years.”
As in the debt-ceiling negotiations ground on, accusations flew back and forth.
“Most of the time I’ve been here in the Senate, the fight over spending and taxes was carried on through the president’s proposed budget and the appropriations process,” said Sen. Jeff Bingaman, New Mexico Democrat. “This year for the first time we have it being carried out as part of this threat to now raise the debt ceiling, so that is sort of the new leverage being used here.”
Lawrence Lindsey, former director of the National Economic Council under President George W. Bush, defended the GOP approach.
“This is one of the games that has been played in Washington for a long time, it’s part of the structure of the ways things are done,” Mr. Lindsey said. “You guys will pass something, it will all work out. But saying, ‘Gee, they’re playing the game, we’ve never played the game” — I’m sorry sir, that’s just not true.”