Democrats and Republicans from the Joint Select Committee on Deficit Reduction, also known as the Super Committee, presented separate proposals to one another to reach the Committee’s $1.2 trillion deficit reduction goal. Up until this week, the substance of the committee’s near daily deliberations had not been made public.
The Democratic plan, discussed in a committee meeting on October 18, would comprise $3 trillion or more in deficit reduction achieved by an equal distribution of spending cuts and revenue increases. This plan is said to be informed by the Senate’s “Gang of Six,” a bipartisan group of senators that created a deficit reduction proposal this summer and briefed Super Committee members the week of October 17 (see Memo, 10/21). Republicans offered a plan on October 19 that would cut $1.5 trillion through spending reductions alone. Republicans are now joined by Democrats in confirming that all spending is under consideration for cuts, including discretionary spending.
The Committee held a hearing on October 19 with Congressional Budget Office Director Douglas Elmendorf to discuss the impacts of discretionary spending in the context of deficit reduction and the Budget Control Act passed in August.
Senator Patty Murray (D-WA), co-chair of the Joint Select Committee, supported discretionary spending her opening statement, saying, “non-defense discretionary spending represents less than one-fifth of total federal spending. But listening to the debates here in D.C. over the last few months, you would think this small piece of the pie was a whole lot bigger.”
Representative Jeb Hensarling (R-TX), co-chair of the committee, agreed with the Senator Murray that addressing discretionary funding may not be enough to reach the committee’s deficit reduction goal. While discretionary spending is shrinking as a portion of federal spending, it has increased under the current Administration. He said the HUD budget alone has increased 22.2%. Mr. Hensarling also said that entitlement spending is growing as a percentage of total federal spending.
Mr. Elmendorf described the impacts of the Budget Control Act on discretionary spending, saying that some federal discretionary programs will not have sufficient funds to operate under the discretionary cuts enacted, highlighting defense programs that will not be able to carry out all currently planned activities for future fiscal years. While discretionary spending under the budget control act would increase annually, it would not match the rate of inflation, causing a decrease in real dollars provided to discretionary programs.
Mr. Elmendorf detailed the impact of sequestration, the automatic cuts set to take effect in January 2013 if Congress fails to adopt a deficit reduction plan by December 23, 2011. He said that $882 million would be cut from defense spending over the ten year period compared to FY11 spending increasing at the rate of inflation. Non-defense spending would be cut by $794 million compared to FY11 with inflation increases. Sequestration for non-defense spending would include discretionary spending as well as non-exempt mandatory spending.
Senator Murray asked pointed questions of Mr. Elmendorf to illuminate the cuts that discretionary spending programs have already taken through the Budget Control Act and the relatively small impact that further discretionary cuts could have on the deficit. “Isn’t it the case that if we completely eliminated discretionary spending we would still face deficits?” asked Senator Murray.
The hearing was interrupted briefly by a protester, who was removed by security staff. The first public meeting of the Super Committee was also interrupted by protesters who chanted loudly in the hallway outside the room until security staff moved them away from the doors (see Memo, 9/9).
The committee will hold its next hearing, “Review of Previous Debt Reduction Proposals,” on November 1 at 11 am in Room 2123 of the Rayburn House office building.