Its task complicated by the cost and politics of President Barack Obama's $447 billion jobs plan, a special House-Senate deficit-cutting panel holds its second meeting in hopes of getting on a path to bipartisan consensus on tackling the government's fiscal woes.
The panel is likely to get some sobering testimony Tuesday about the budget deficit's toxic effect on the economy over the long term from economist Douglas Elmendorf, the director of the nonpartisan Congressional Budget Office.
Elmendorf's message? U.S. deficits are unsustainably high and wrestling them under control will require the American public to give up some government services or pay more in taxes for them -- or a combination of both.
Obama's jobs plan calls for the opposite: a temporary boost in spending on roads, schools and blighted neighborhoods combined with cuts to the Social Security payroll taxes paid by workers and their employers. He would pay for the initiative with a tax increases on wealthier workers, oil companies and hedge fund managers -- all proposals that are opposed by the GOP.
"Getting Americans working again will not only help families who are struggling, but is also the most effective way to reduce the deficit in the short term," panel member Rep. Chris Van Hollen, D-Md., said Monday.
But every dollar spent stimulating the economy makes the supercommittee's task that much more difficult. Co-chairman Rep. Jeb Hensarling, R-Texas, is clearly irked.
"This proposal would make the already arduous challenge of finding bipartisan agreement on deficit reduction nearly impossible, removing our options for deficit reduction for a plan that won't reduce the deficit by one penny," Hensarling said. "It's not the role of this committee to spend more money we don't have on jobs we don't get."
The supercommittee is charged with finding at least $1.2 trillion in deficit cuts over the coming decade, which would come on top of about $900 billion in savings wrung from the operating budgets of Cabinet agencies over the same period.
Recent CBO studies say the recent budget pact is just a starting point on the more draconian changes that would be needed to stabilize the national debt so it doesn't spiral out of control and drag the economy down with it.
Numerous lawmakers and deficit hawks outside the government are pressing the panel to exceed the $1.2 trillion goal and perhaps pick up elements of the $4 trillion "grand bargain" that Obama and House Speaker John Boehner, R-Ohio, were working on this summer. It combined higher tax revenues with sharper spending cuts.
There's considerable skepticism in Washington that the panel will be able to agree on serious cuts, especially with next year's elections approaching. Most Democrats are ardently against cuts in expensive benefits like health care for the elderly, while Republicans are adamantly against higher taxes -- the two most plentiful sources of potential deficit reduction.
Under the debt ceiling agreement, which narrowly averted a potential federal default, Congress must approve at least $1.2 trillion in savings by Dec. 25. If it doesn't, the difference would be made up by automatic spending cuts, divided evenly among defense and many domestic programs.
A CBO study released Monday shows that the impact of the across-the-board cuts would hit the Pentagon with a 10 percent budget cut in 2013 and cuts almost that big to domestic agencies.
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