The Joint Select Committee on Deficit Reduction, known as the Super Committee, continued its second week of meetings, including a hearing on September 13, entitled “The History and Drivers of Our Nation's Debt and It's Threats.” Congressional Budget Office (CBO) Director Douglas Elmendorf Was the sole witness (see Memo, 9/9).
Mr. Elmendorf advised the Committee to craft a plan that does not implement immediate fiscal austerity, but instead stimulates recovery though short term deficit spending and tax cuts, and addresses long term deficit reduction.
The Committee must select a baseline by which the CBO will measure its anticipated deficit reduction measures. In his testimony, Mr. Elmendorf presented different 10-year deficit baseline options, including a “current law” deficit estimate of $3.5 trillion and a “current policy” estimate of $8.5 trillion.
A “current law” baseline assumes Congress will enact no changes to current law governing entitlement programs and taxes, this allowing tax cuts and other measures scheduled to expire will do so, including the expiration of payments to doctors participating in Medicare. Under a current law baseline, it will be easier for the Super Committee to achieve deficit reductions because the scheduled expiration of these tax cuts would by themselves accomplish significant savings.
Alternately, a “current policy” or alternate baseline assumes that Congress will extend the 2001 and 2003 tax cuts (other than those for upper-income taxpayers) and provide relief from the alternative minimum tax. A current policy baseline, according to a August 1 Center on Budget and Policy Priorities paper, was used by the President’s Commission on Fiscal Responsibility and Reform, the Bipartisan Policy Center Debt Reduction Task Force, the Gang of Six, and negotiations between the Administration and congressional leaders.
Speaker of the House John Boehner (R-OH) has stated he believes the Super Committee must use a current law baseline. CBPP argues that the Super Committee could use current policy to establish its baseline, or some variation. Regardless, CBPP points out that “it is the Administration, not Congress, which must estimate whether a Joint Committee proposal that Congress enacts has met the Committee’s $1.5 trillion savings target.
The Committee also held its first private meeting on September 15 to discuss policy issues and its next hearing, entitled “Revenue Options and Reforming the Tax Code,” is scheduled for September 22.
At a September 15 press conference, a bipartisan group of non-Super Committee Senators presented principles that they advise the Super Committee to abide by, including:
- Include enough deficit reduction to stabilize the debt as a share of the economy, put the debt on a downward path, and provide fiscal certainty.
- Use the established, bipartisan debt and deficit reduction frameworks as a starting point for discussions.
- Focus on the major parts of the budget and include long-term entitlement reforms and pro-growth tax reform. Structure the plan to grow the economy in the short, medium and long-term.
- And, include the American public in a broader discussion about the breadth of the issues, challenges and opportunities facing our country.
In a speech on September 15, Speaker Boehner said that the Super Committee should not consider tax increases to address the deficit. He proclaimed that “the joint committee is a jobs committee,” saying that tax increases would impede job growth.
It is not clear how the Super Committee will consider President Barak Obama’s jobs plan, which he unveiled September 8 and urged the Committee to incorporate into its plan. The President is also expected to send deficit reduction proposals to the Super Committee.
NLIHC sent a letter to Super Committee on September 13, urging its members to protect housing resources for extremely low income households by ensuring sufficient revenues are included in the Committee plan. “I urge you to adopt a pledge that will assure that the lowest income and most vulnerable people in our country are not adversely affected by any decisions you make. This includes assuring at least level funding for all existing HUD and USDA programs that assist low income renters,” said NLIHC President and CEO Sheila Crowley said in the letter.
NLIHC also joined members of the Homeless Advocates Group in signing a September 16 letter to members of the Super Committee urging them “to do no harm to individuals and families experiencing or at high risk of homelessness by weakening the discretionary and entitlement programs that serve them.” Specifically, the letter asks Committee members not to cut domestic discretionary spending for affordable housing programs or those targeted to homeless and at-risk populations, not to cut or alter the basic structure of Medicaid, and to protect the safety net by including new revenues in the deficit reduction plan. The Homeless Advocates Group is a collaboration of housing, homelessness, health care, domestic violence, and other organizations and is convened by the National Law Center on Homeless and Poverty.
View Mr. Elmendorf’s testimony: http://www.cbo.gov/doc.cfm?index=12413
View CBPP’s report: http://www.cbpp.org/files/8-1-11bud.pdf
View NLIHC’s letter: http://nlihc.org/doc/NLIHC_Super_Committee_Letter_9-13-11.pdf
View HAG’s letter: http://nlihc.org/doc/HAG_Super_Committee_Letter_9-16-11.pdf
View the Super Committee’s website: http://deficitreduction.senate.gov/public/index.cfm/