Deficit panel split; package in doubt

Associated Press

WASHINGTON

A painful package of spending cuts and tax increases drew sharp challenges from both the left and right on President Barack Obama’s deficit commission Wednesday, putting approval in doubt. However, both parties’ Senate budget point-men embraced the plan, and even opponents called it a starting point for efforts next year to control the nation’s ballooning debt.

“It’s a template that gives people an opportunity to start discussing what we have to do to get our fiscal house in order,” said Rep. Xavier Becerra, a California Democrat on the panel who hasn’t said whether he’ll support the package.

The 18-member bipartisan commission scheduled a vote on the plan for Friday. But as Wednesday’s meeting demonstrated, the co-chairmen, Democrat Erskine Bowles and Republican Alan Simpson, face a difficult chore in rounding up the 14 votes needed to send the plan to Congress for consideration.

Winning over lawmakers who also are panel members appeared to be the biggest remaining challenge, given the politically incendiary nature of many of the proposals. The tax increases it includes are deal-breakers for some Republicans, likewise social-program cuts for some Democrats.

The plan calls for sweeping tax changes that would affect millions of Americans, including trimming or doing away with many popular tax breaks such as the home-mortgage deduction. It also would make deep cuts in military spending, slash the federal work force, raise the retirement age for full Social Security benefits and make cuts in Medicare. It aims to reduce federal red ink by nearly $4 trillion within a decade.

Although prospects for the plan are unclear, the attention it has received has helped awaken the nation to the depth of the economic hole the country is in and the need for bold action to dig out, suggested Bowles, who was former President Bill Clinton’s White House chief of staff. Simpson is a former Republican senator from Wyoming.

“The American people get it now. People want this to happen,” Bowles said.

While the deficit commission grappled with longer-term economic woes, congressional Democrats and Republicans worked separately to strike a deal with the White House on a more immediate financial issue: extending Bush-era tax cuts that expire Dec. 31.

And despite talk of finding common ground, neither side seemed willing to yield much as negotiations began with Treasury Secretary Timothy Geithner and Budget Director Jacob Lew.