Hensarling Blames Debt Panel Collapse On Dems

By Andrea Salazar

The Republican co-chair of the Joint Select Committee on Deficit Reduction blamed Democrats Tuesday for the committee’s failure to come up with a deal to reduce the nation’s deficit by $1.2 trillion over the next 10 years.

“[Democrats] were unwilling to agree to anything less than $1 trillion in tax hikes — and unwilling to offer any structural reforms to put our health-care entitlements on a permanently sustainable basis,” wrote Rep. Jeb Hensarling (R-Texas) in a Wall Street Journal opinion piece.

President Obama’s “disappointing lack of leadership” didn’t help the matter, Hensarling said.

“Unfortunately, the committee’s challenge was made more difficult by President Obama. Since the committee was formed, he has demanded more stimulus spending and issued a veto threat against any proposed committee solution to the spending problem that was not coupled with a massive tax increase.”

Despite the committee’s inability to come up with a plan, Hensarling remains committed to “ensuring that full deficit reduction is realized.”

“As Winston Churchill said, ‘Americans can always be trusted to do the right thing, once all other possibilities have been exhausted.’ Despite my disappointment with the committee’s setback, I remain confident that we will yet again prove Churchill right.”

Bloomberg Urges Super Committee To Go Big, Promotes Higher Taxes For All

By Andrea Salazar

New York City Mayor Michael Bloomberg called on federal lawmakers Tuesday to seriously address the nation’s debt and deficit by allowing the Bush tax cuts to expire.

In a speech at the left-leaning Center for American Progress in Washington, D.C., Bloomberg touted the plan put forth last year by President Obama’s debt commission. The proposal co-crafted by Democrat Erskine Bowles and Republican Alan Simpson, featured large spending cuts, scaled-back tax breaks, increases to personal tax rates and tweaks to federal entitlement programs like Social Security and Medicare.

“The spending cuts in Simpson-Bowles, plus Clinton-era tax rates, plus closing some tax loopholes and ending wasteful subsidies would save $8 trillion and effectively bring our budget into balance by 2021,” Bloomberg said during a speech at the Center for American Progress in Washington.

Bloomberg warned that the current deficit committee’s goal of $1.2 trillion in cuts “would be almost as bad as getting no deal at all.” He called that figure “a drop in the bucket” compared to the nation’s $14.6 trillion debt.

“It will allow Congress to walk away from real deficit reduction until at least 2013.”

Calling for “a flatter and lower” tax, Bloomberg called on President Obama to allow the Bush tax cuts expire for all tax brackets.

“All income groups have to be part of the solution,” Bloomberg said. “It’s fair to ask those who earn more to bear more of the burden. That is the whole idea behind a graduated income tax,” Bloomberg said. “But all of us should help carry the load.”

However, the Mayor, who also happens to be the 12th richest person in the U.S., acknowledged that his recommendations are not a “cure-all,” adding that entitlement, tax and immigration reforms are also necessary.

Addressing the gridlock in Congress, Bloomberg pushed Democrats and Republicans to compromise. “We are not going to be able to cut our ways out of the problem and we’re not going to be able to just tax our ways out of the problem,” he said. “We must do both.”

“All sides have to be willing to give on something,” Bloomberg added. “We don’t have to slaughter the sacred cows but we do need to get a little milk from them.”

Obama On Jobs Bill: No Games, No Politics, No Delays

President Obama announced Monday that he is presenting Congress with the American Jobs Act and urged the legislative body to pass the bill “immediately.”

“This is the bill that Congress needs to pass,” Obama said from the Rose Garden where he was joined by Vice President Joe Biden and a handful of teachers, construction workers, police officers, firefighters and veterans. 

“No games, no politics, no delays,” Obama said. “I’m sending this bill to Congress today and they ought to pass it immediately.” 

Obama ensured that the $447 billion dollar proposal would be paid for in full and would not add a single cent to the deficit. The president said that he will unveil a plan sometime next week that would include details describing how he plans to pay for his jobs bill. The payment plan will also include measures to further reduce the country’s deficit, according to the president.

During his remarks, Obama called on Americans once again to call and email their representatives and urge them to shy away from partisan politics and pass his jobs bill sooner rather than later. 

“The fact of the matter is the next election is 14 months away,” Obama said. “The American people don’t have the luxury of waiting 14 months for Congress to take action.”

Panel Argues For "Super Committee" Cuts To Be Private Until Finalized

In a paneled discussion hosted by the Brookings Institute on Friday, three fiscal experts discussed the deficit’s impact on American national security and foreign policy.

Panelists included ,  and e at Brookings. Michael O’Hanlon, director of research for Foreign Policy and the 21st Century Defense Initiative, moderated the discussion. 

“We have a new opportunity now to solve the real problem and this deal may be the first step towards a positive resolution,” Alice Rivlin, senior fellow of economics studies at the Brookings Institution, said about the new deficit-reduction bill. 

The deficit-reduction deal, signed by President Obama on August 3, requires between $400 million and $1.5 billion of cuts from the national security budget, most of which is projected to come from defense. 

According to Rivlin, there are three critical moves to reduce deficit spending; reduce the growth of entitlement spending, reform tax codes to ensure increased tax revenue and cap discretionary spending.

Rivlin explained that the fastest growing major category in the defense budget is healthcare and major cuts need to be made. 

“The TRICARE For Life Program is an extremely generous and costly healthcare program that should be monitored,” Rivlin suggested.

TRICARE For Life is a Medicare supplement entitlement for medicare-eligible military employees and their dependents that have little co-insurance or deductible.

Former National Security Adviser Stephen Hadley echoed Rivlin’s sentiments and said that it is not fair to the active military force that the retirees have as good of a deal as it does.

“We let people retire after 20 years when they are fairly young and they can get other jobs but they still receive military retirement. Let us lengthen the period of service… so we pay them but we also get something for it in terms of our contribution to the military. There is an interaction and a set of reforms that can both make the military better and more effective and less costly,” Hadley said.

But, according to Senior Fellow Peter Singer, director of the 21st Century Defense Initiative, it is not as much about what to cut as it is about how to cut.

“We need to focus on the how question. What are the principles by which we might go about it smartly? Identify where real savings are versus false savings,” Singer said. 

“We have to be willing to question 20th century assumptions about 21st century national security,” Singer continued. “We have personnel benefit system that is designed for the generation of mad men that is now the generation of google. It’s expensive and doesn’t fit their needs.” 

Singer also suggested cutting areas in Pentagon spending, such as the National Missile Defense program. 

“We have spent more on that project than we spent on the entire Apollo space project that put a man on the moon,” Singer revealed. 

Over the past 27 years, the U.S. government has spent an estimated $150 billion on the National Missile Defense program and the success rate is a mere 8 out of 15, according to Singer. The Apollo mission, which successfully put man on the moon, cost an approximate $100 billion. 

All three panelists agreed, however, that whatever the “super committee” decides to cut should be kept quiet until it is finalized. They suggested some form of a non-disclosure agreement so ideas will not be immediately shut down as they are circulated in the press and people won’t hear about various cuts without understanding the context they are made in or the strategic trade-offs.

Schumer: Dems Have "Upper Hand" In Deficit Talks

By Philip Bunnell

Sen. Chuck Schumer (D-N.Y.) said Thursday that Democrats now have “the upper hand” in the deficit reduction talks with Republicans. 

“Senator McConnell has walked out on a long limb…by insisting that he will not accept any deal if it includes revenues,” said Schumer during a speech at the Economic Policy Institute in Washington.

Schumer said that there are not enough Republicans in the House who will vote for “a debt limit increase under any circumstances at all,” which he said means that “Speaker Boehner…is going to need Democrats.”

This leverage, Schumer says, will allow Democrats to insist upon their priorities: “no cuts to Medicare beneficiaries, balanced use of cuts and revenue to reduce the deficit, and a focus on jobs.”

The New York Democrat accused Republicans of “bluffing” on their pledge to vote against raising the country’s debt limit unless Democrats agree to take tax increases off the table. GOP lawmakers, Schumer said, are “perfectly willing to cause us to default on our obligations rather than give a single inch in the negotiations.” 

“If the public comes to believe that Republicans are deliberately sabotaging the economy, it will backfire [on them] politically,” he added.