Supercommittee Hears Advice From Deficit Hawks

By Janie Amaya

With an important deadline sitting on the horizon for the Joint Deficit Reduction Committee, the bipartisan body was given advice Tuesday from those who have also attempted to solve the nation’s fiscal woes.

Co-Chairs of the Bipartisan Policy Center (BPC) Debt Reduction Task Force Dr. Alice Rivlin and former Sen. Pete Domenici (R-N.M) urged the committee to put ideology aside and instead cooperate across the partisan lines by recommending a three-step process to deficit-reduction. 

In their proposal “The Road to the Grand Bargain,” as they call it, the BPC recommends the committee focus on Social Security, Medicare and Medicaid without hurting those who rely on it the most.

According to BPC, the three-step process is already underway. The passage of the Budge Control Act is the first step in which the committee was given authority to create the deficit-reduction plan. 

In addition, BPC said it recommends the committee to identify a down-payment of $1.2-$1.5 trillion in net deficit reduction over ten years, which it noted should be accompanied by a one-year payroll tax holiday to spur the economy. 

The BPC also noted that the committee should instruct the relevant authorizing committees to legislate further reform, especially on pro-growth tax reform that raises revenue, and structural Medicare reform.  

With their plan, BPC hopes to reduce and stabilize the national debt below 60 percent of the gross domestic product (GDP) by 2020.

“If we don’t do this, those who are for increasing health care and Social Security are not credible,” Domenici said. 

Also providing testimony were Clinton Chief of Staff Erskine Bowles and former Sen. Alan Simpson, co-chairmen of the National Commission on Fiscal Responsibility and Reform. 

Their recommendations take a similar approach to Rivli and Domenici’s plan of cutting $4 trillion over ten years, stabilizing debt as a percentage of GDP and putting it on a downward trajectory. 

On mandatory spending, Simpson and Bowles advised the committee to reduce low priority or wasteful spending, including subsidies that are poorly targeted or create perverse incentives. 

“This is the toughest thing you have ever been in or will ever be in without question. You have my deepest admiration and respect - all of you. And you all know what you have to do, in your gut, you know what you have to do,” said Simpson.