Tags: White | House | Fiscal | Task | Force

White House Preparing Fiscal Task Force

Wednesday, 20 Jan 2010 09:57 AM

 

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The White House and congressional Democrats have reached a tentative deal to set up a task force that could make it easier for lawmakers to approve tax increases, spending cuts or other unpopular measures needed to reduce budget deficits, lawmakers and aides said on Tuesday.

The proposed commission would enable President Barack Obama to say he is taking steps to reduce record budget deficits over the long term during his State of the Union address next week without having to spell out how he would do so.

It also would breathe new life into a similar proposal that is expected to be rejected by the Senate as soon as this week.

Washington has a long track record of outsourcing thorny issues to commissions, then ignoring their findings. But this task force could have more clout.

"I think there is a way to get an executive order which will provide for votes in either house, in both houses, under certain circumstances which are being discussed," said House of Representatives Majority Leader Steny Hoyer on Tuesday morning, before he met with Vice President Joe Biden and other Democrats at the White House.

Those at the meeting reached a tentative deal that would ensure that Congress would vote on any findings reached by the task force, a congressional aide said.

That would go a long way toward satisfying fiscal hawks like Senate Budget Committee Chairman Kent Conrad who say Congress would not take any painful steps unless it is forced to vote on them.

The total amount of U.S. debt has more than doubled over the past decade to $12.25 trillion, thanks to a combination of tax cuts, wars in Iraq and Afghanistan, and the deepest recession since the 1930s.

The government spent a record $1.4 trillion more than it collected in the fiscal year that ended on September 30, 2009, and deficits are projected to remain stubbornly high over the coming decade as costs for retirement and healthcare programs rise.

Experts warn that investors could demand higher interest rates for U.S. debt, leaving less room in the budget for other uses.

Public concern is growing over the issue, and a tough vote looms in coming weeks as Congress will have to raise the $12.4 trillion debt limit before the Treasury Department exceeds it.

Conrad will offer his budget commission proposal as an amendment, but it has been expected to fail.

Top Democrats, including House Speaker Nancy Pelosi, worry that the commission would undercut their authority and in recent weeks special-interest groups have mobilized against it. Pelosi has not yet signed off on the deal, according to an aide.

The deal would also clear the way for the Senate to approve a separate measure that aims to keep the deficit from worsening. Nicknamed "paygo," it would require new spending to be offset by cuts elsewhere. Conrad and other fiscal hawks say a version passed last year by the House is too full of loopholes, but it was unclear whether the Senate version would differ significantly.

© 2014 Thomson/Reuters. All rights reserved.

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