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Divided Deficit Reduction Panel Bears Blunt Critique

A prominent group of former policymakers offered a bleak outlook today to the Joint Committee on Deficit Reduction, with former White House Chief of Staff Erskine Bowles bluntly saying that he was concerned the panel would fail.

“Collectively I’m worried you are going to fail — fail the country,” Bowles said in a public hearing, flanked by budget partner and former Sen. Alan Simpson (R-Wyo.), founding Congressional Budget Office Director Alice Rivlin and former Sen. Peter Domenici (R-N.M.).

Of the four budget experts, Simpson was by far the most frank in his assessment of both the group’s progress and the reality of Washington’s political climate, launching snide remarks at Grover Norquist of Americans for Tax Reform in one moment, then at Congress’ lack of direction the next.

“If Grover Norquist is the most powerful man in America, he should run for president,” Simpson said of the man most famous for getting the vast majority of Republicans to sign his pledge against new taxes.

“If you spend a buck and borrow 42 cents of it, you’ve got to be stupid,” Simpson said earlier. “If you spend more than your earn, you lose your butt.”

The super committee has 22 days left to strike a deal and is struggling to find a bipartisan agreement that includes both entitlement reform and revenues. The committee must find $1.2 trillion in savings over the next 10 years to go with nearly $1 trillion in spending cuts enacted under the Budget Control Act in August.

Democrats are loath to support a deal that only contains spending cuts, such as the debt limit deal or even the agreement to avert a government shutdown in the spring, and the four witnesses gave some cover to the Democratic position by urging the super committee to “go big.”

“This is a problem we can’t grow our way out of,” Bowles said. “It’s not a problem we can solely tax our way out of. … It’s also a problem we cannot solely cut our way out of — I think you all have proved that over the last year.”

Both the Bowles-Simpson budget plan, which emerged last winter from the president’s deficit commission, and the Domenici-Rivlin plan, developed in 2010, embraced overhauls of the tax code and significant entitlement reform. In preliminary offerings made within the super committee last week, Democrats put forward a $3 trillion outline that included $1.3 trillion in revenues, while Republicans offered a $2.2 trillion plan that counted savings from cuts to Medicare beneficiaries as part of its revenue generation.

The rhetorical finger-pointing and tension between entitlements and taxes were on full display before the C-SPAN cameras today, with Democrats focusing their statements and questions primarily on taxes and Republicans focusing on entitlements.

“What could not be clearer is that unless we offer fundamental and structural reforms to our nation’s entitlement programs, especially health care, we will not only end up failing in our duty, we may fail our nation as well,” super committee Co-Chairman Rep. Jeb Hensarling (R-Texas) said, before Bowles made “fail” the word of the day.

Hensarling, the House Republican Conference chairman, then centered his first question to the witnesses around entitlement reform, pressing the panel to acknowledge that the “No. 1 challenge we face in the structural debt crisis is health care.”

His Democratic counterpart, Sen. Patty Murray, underscored the need for a “balanced approach” that also tackled tax reform as the panel enters the “critical final phase” of its work.

“As this committee moves into the home stretch, hearing more about the importance of a balanced approach is going to be very helpful. Because as our witnesses today can address, a bipartisan deal isn’t possible if members refuse to come out from their partisan or ideological corners,” the Washington Democrat said. “It’s not enough for either side to simply say they want to reduce the deficit.”

By holding open court with Bowles, Simpson, Domenici and Rivlin, the super committee was able to check yet another box off its complicated public and private battle to strike a deal. Last month, the panel met behind closed doors with the bipartisan “gang of six” Senators who have worked on their own deficit reduction proposal.

Although nothing about today’s back-and-forth gave any greater reason to hope for a deal, the expert witnesses warned that super committee deadlock, to which some seem resigned, is a terrible outcome, both for confidence in Congress and the American economy.

“We urge you to avoid the sequester,” Rivlin said, referring to the 10 years of across-the-board cuts affecting defense spending, domestic discretionary spending and Medicare if the committee fails.

On Monday, Speaker John Boehner gave a speech in Louisville, Ky., pushing the group to come to agreement and noting that sequestration would be unacceptable.

“Common ground doesn’t mean compromising on your principle. Common ground means finding the places where your agenda overlaps with that of the other party, locking arms and getting it done, without violating your principles,” the Ohio Republican said in a panel appearance with Senate Minority Leader Mitch McConnell (R-Ky.). “The jobs crisis in America today demands that we seek common ground, and act on it where it’s found.”

Senate Majority Leader Harry Reid warned his Conference during today’s caucus lunch of the repercussions if the super committee falls short, but the Nevada Democrat seemed to try to shift the burden for the panel’s success to the Republicans.

“I read to my caucus today what happens in sequestration with domestic discretionary spending. … But my friend John Boehner wants this grand bargain without any sacrifice to their people that have most of the money in this country. … So I would hope we can get something done there, but, you know, if they can’t get it done, they can’t [get] it done. You have to have two. It takes two to tango,” Reid told reporters after the lunch.

McConnell said today he would not have supported the legislation creating the super committee if he thought it could not succeed.

“I wouldn’t have lightly been a part of crafting a process that reduced the number for success in the Senate to 51 and eliminated the possibility of amendments if I was not interested in getting an outcome,” he told reporters after his Conference’s lunch. “My view is, on really difficult challenges, divided government is actually the best time to do it, not the toughest time, but the best time to do it. … My view is, why not now?”

The Senate Republican members of the super committee were spotted shuttling between votes and Boehner’s office today. In recent weeks, GOP members of the committee have been meeting more regularly with their leadership.

Correction: Nov. 1, 2011

An earlier version of this story misattributed a quote. It was former White House Chief of Staff Erskine Bowles who told the Joint Committee on Deficit Reduction, “Collectively I’m worried you are going to fail — fail the country.”

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