Senate Working on New Deficit Plan
The Wall Street Journal reports:
A bipartisan group of senators is considering legislation that would trigger new taxes and budget cuts if Congress fails to meet a set of mandatory spending targets and other fiscal goals aimed at reducing federal deficits.
The plan would break the task of deficit reduction into four pieces: a tax code overhaul; discretionary spending cuts; changes to Medicare, Medicaid and other entitlements; and changes to Social Security, aides said. The Social Security system is on firmer financial footing than other major entitlement programs and raises political sensitivities that lawmakers want to deal with separately.
The proposal builds on the work of President Barack Obama's deficit commission, according to aides working on it.
"We're getting close," said Senate Majority Whip Richard Durbin (D., Ill.), one of six senators working on the plan. "We understand that if we're going to do something that's important, it has to be timely." He said the group hopes to reach agreement "in a matter of weeks, or months."
In addition to Mr. Durbin, the second-ranking Senate Democrat, the group include Budget Committee Chairman Kent Conrad (D., N.D.), and one of the Senate's most conservative fiscal hawks, Tom Coburn (R., Okla.). Messrs. Coburn and Durbin are personally close to President Obama.
Aides working on the effort said negotiations are delicate and other options might come forward. The framework of targets and penalties is expected to be circulated to a broad group of senators by early next month.
The proposal came up in a White House meeting Wednesday among Democratic leaders. A White House spokeswoman said the President is committed to finding "an effective and balanced approach to reducing the deficit" and "beginning a conversation on entitlement reform."
The new budget the president sent to Congress on Monday envisions that spending on all the programs funded annually by Congress, including defense programs, will decline slightly over the next 10 years. Unless current trends are changed, spending on Social Security will rise 71%, spending on Medicare will rise 72% and spending on Medicaid will rise 115% over the same period, with the increases getting bigger after that.
The Senate group's working plan calls for placing separate caps on security and nonsecurity spending, and missing a budget target in one area would not trigger mandatory cuts in the other. The spending targets would follow proposals laid out by the deficit commission, which recommended cutting discretionary spending by $1.7 trillion through 2020. Lawmakers on the spending committees would draft legislation to meet the targets. But if they were not met, automatic, across-the-board cuts would go into effect. ...
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