Politics
3:00 am
Wed October 26, 2011

Supercommittee Reconvenes On Deficit Reductions

Originally published on Wed October 26, 2011 6:49 am

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Transcript

ARI SHAPIRO, HOST:

It's MORNING EDITION from NPR News. I'm Ari Shapiro filling in for Steve Inskeep, who's visiting Oregon Public Broadcasting in my hometown of Portland.

RENEE MONTAGNE, HOST:

And I'm Renee Montagne. Remember the supercommittee, that congressional panel charged with shrinking federal deficits by more than a trillion dollars? It's got a deadline and there are just four weeks left to agree on a plan. Today the supercommittee is holding only its third public hearing; for the most part, those six Democratic and six Republican lawmakers have huddled behind closed doors. If they fail to agree on a plan, it could trigger big automatic spending cuts. But as NPR's David Welna reports, partisan differences over taxes and cuts in entitlement spending are making it hard to strike a deal.

DAVID WELNA, BYLINE: The dozen members of what's formally known as the Joint Select Committee on Deficit Reduction won't reveal what they've discussed during nearly seven weeks of private meetings. And today's public hearing won't likely shed much light on their internal deliberations. Its only witness is Congressional Budget Office director Douglas Elmendorf, who's testifying for the second time before the supercommittee. In his last appearance, Elmendorf told the panel it should come up with a deficit reduction plan by next Monday. That, he said, would give his office the time it needs to assess the plan's potential impact by the committee's November 23 deadline to approve a deal. Supercommittee co-chairman Jed Hensarling is a House Republican from Texas. He was asked yesterday about increasing concerns that the committee won't make that deadline. While he was upbeat, Hensarling did not report any progress.

REPRESENTATIVE JEB HENSARLING: I remain encouraged that the members of the Joint Select Committee know how serious the situation is. I believe they are all committed to achieving the goal. And until the stroke of midnight on November 22, we still have plenty of time to do the committee's work.

SENATOR MARK WARNER: Clearly the supercommittee is not going to be able to get this all done in a few weeks.

WELNA: That's Virginia Democratic Senator Mark Warner. Like a growing number of lawmakers from both parties, Warner thinks the supercommittee should come up with a two-step plan. The first installment would be an initial modest reduction in deficits. The second would be tasking relevant committees to shrink deficits even further.

WARNER: The idea that some form of two-step that gets us towards this, you know, goal which all the economists I've seen left and right say, you know, $4 trillion in deficit reduction is what drives the debt to GDP ratio to a reasonable level, and that's going to take reform of entitlements and reform of taxes.

WELNA: But therein lies the problem. Democrats want a plan that increases tax revenues and Republicans don't. Republicans want to cut entitlements such as Medicare and Medicaid, but Democrats, including President Obama, say that's a non-starter, unless taxes are also raised on the wealthy. Should the supercommittee fail to reach agreement, a law passed by Congress in August says that $1.2 trillion worth of spending, half of it defense-related, would be cut automatically over a 10 year period starting in January of 2013. Defense hawks already are threatening to undo that law. Arizona Republican Senator John McCain is one of them.

SENATOR JOHN MCCAIN: My reaction is that if there's a failure on the part of the supercommittee, that we will be amongst the first on the floor to nullify that provision. The Congress is not bound by this. It's something we passed, we can reverse it.

WELNA: The prospect of a major deficit reduction plan either failing to materialize or unraveling has many worried that the August downgrades of the U.S. credit rating could soon be followed by more. And this divided Congress once again would likely take the blame. David Welna, NPR News, the Capitol. Transcript provided by NPR, Copyright NPR.