Obama to open first meeting of deficit commission
By Lori Montgomery
President Obama will address the 18 members of his bipartisan deficit commission next week when they convene at the White House for the first in a series of monthly meetings aimed at building consensus behind a plan to erase the nation's soaring budget deficits.
Following Obama's address at 9:30 a.m. April 27, administration officials said Monday, the commission will adjourn to a conference center facing Lafayette Park to hear from an array of economic experts worried about the budget outlook, including Federal Reserve Board Chairman Ben S. Bernanke. In recent speeches and congressional testimony, Bernanke has warned lawmakers that they must act quickly to raise taxes, cut major entitlement programs such as Medicare or both to avoid a budgetary crisis down the road.
In addition to Bernanke, the commission will hear from White House Budget Director Peter Orszag, Urban Institute president Robert Reischauer and senior fellow Rudy Penner. The three are all former directors of the Congressional Budget Office, which guides Congress on fiscal matters and is widely viewed as an objective and impartial adviser. Administration officials said the four witnesses were chosen in part to provide political balance: Penner and Bernanke were appointed by Republicans, while Orszag and Reischauer took their posts under Democrats. All four have long made clear that they believe the magnitude of the government's looming budget problems will require both spending cuts and tax increases.
Obama appointed the deficit commission in February to develop a plan to tackle the problem. The annual budget deficit hit $1.4 trillion last year -- or nearly 10 percent of the economy, the largest percentage since World War II -- and this year's deficit is projected to be even higher. Deficits are forecast to drop as the nation recovers from recession, but they would never fall below $700 billion a year -- or about 4 percent of the economy -- under the president's budget and they would begin rising again after 2014 as retiring baby boomers made claims on federal retirement programs such as Medicare and Social Security. Deficits of that size would require the nation to continue borrowing heavily from China and other creditors, driving the national debt to nearly 90 percent of the economy by 2020, according to the CBO.
Obama has tasked the commission with developing a plan to reduce the deficit to 3 percent of GDP by 2015, bringing spending and revenue into balance exclusive of interest payments on the debt. If 14 of the commission members can agree to such a plan, House and Senate leaders have pledged to bring it to a vote after the fall midterm elections.
Hopes for a sweeping agreement are not high, either among outside fiscal experts or the members themselves, who include six White House appointees and 12 lawmakers appointed by congressional leadership of each party. At least two congressional Republicans would have to sign on to any proposal in order for the commission to adopt it. However, those involved with the commission say prospects for compromise will not be clear until the group actually meets. Co-chairmen Alan K. Simpson and Erskine Bowles jointly paid initial visits to all 12 lawmakers late last week.
"We're doing everything together. There's no daylight between us," Bowles said as he emerged from his only solo meeting, a visit with Senate Budget Committee chairman Kent Conrad (D-N.D.) that took place before Simpson arrived from Wyoming.
Along with the commission's executive director, Bruce Reed, a longtime Democratic policy expert who heads the Democratic Leadership Council, Simpson and Bowles informed lawmakers that they plan to hold monthly public meetings to focus on the broad issues facing the commission. They also plan to assemble three working groups, which will meet privately to focus more closely on entitlements, tax reform and discretionary spending.
Obama has asked the commission to issue a report after the elections, on Dec. 1.
April 19, 2010; 2:20 PM ET
Categories: 44 The Obama Presidency
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