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Senators in Deficit ‘State of Shock’

CBO’s Fiscal Jolt Gets Members From Both Parties Calling for Swift Action

Scott J. Ferrell/CQ Roll Call
Senate Budget Chairman Kent Conrad is calling for a budget summit to address the nation’s fiscal challenges. The North Dakota Democrat said the Congressional Budget Office’s new deficit estimates are a “wake-up call.”

A Congressional Budget Office forecast of a record $1.5 trillion deficit this year and potentially an additional $12 trillion in the coming decade gave a jolt of energy Wednesday to bipartisan talks aimed at reaching a grand compromise — even as leaders kept up their fiscal bickering.

“I think everyone is in a collective state of shock right now over the CBO numbers,” Sen. Mark Kirk (R-Ill.) said, predicting even more momentum for the GOP drive to reduce spending.

The day was marked with finger-pointing and a bevy of seen-before proposals for cutting spending and slashing the deficit. Democrats questioned President Barack Obama’s earmark veto promise from the State of the Union address, and Republicans blamed the president for adding to the deficit.

Several bipartisan groups of Senators have already been meeting to hash out broad deficit reduction proposals, and the new estimates are only the latest “wake-up call,” Senate Budget Chairman Kent Conrad said.

The North Dakota Democrat reiterated his call for a budget summit with the House, Senate and White House aimed at cutting a long-term deal.

Conrad and other supporters of last year’s fiscal commission plan, which proposed $4 trillion in deficit reduction over the coming decade, are also meeting behind the scenes to plot their next steps. And Sens. Mark Warner (D-Va.) and Saxby Chambliss (R-Ga.) said they are hoping to introduce their bill to implement the fiscal commission’s recommendations soon.

Senate Republicans separately held a luncheon on fiscal issues where the CBO forecast loomed large, and 19 Republican Senators, led by Orrin Hatch (Utah), proposed a balanced budget amendment to the Constitution. Like Conrad’s summit idea, this amendment proposal is nothing new.

Still, Senators said they found new urgency after the State of the Union and with the CBO numbers.

“I think everyone’s finally coming to the realization that we don’t have time,” given the seriousness of the problem, Sen. John Ensign (R-Nev.) said.

“At the earliest possible time we’ve got to come to an agreement on the deficit, and it’s got to be a compromise,” Sen. Benjamin Cardin (D-Md.) said.

In the meantime, Republicans and Democrats sniped at each other even as they called for bipartisanship, and the parties are still far apart with a March 4 deadline looming for funding the federal government for the remainder of the fiscal year.

Senate Minority Leader Mitch McConnell (R-Ky.) blamed Obama for adding $3 trillion to the debt on his watch and said the public wanted significant spending cuts, not merely the five-year domestic discretionary spending freeze that the president proposed in his State of the Union address Tuesday.

Democratic leaders said the Republican proposals to immediately slash domestic spending back to 2008 levels would hurt the economy just when it’s getting back on its feet.

“Republicans view the budget as a piñata,” Majority Whip Dick Durbin (D-Ill.) said, arguing that they are “mindless” in seeking budget cuts.

“They want to have a fire sale,” Democratic Senatorial Campaign Committee Chairwoman Patty Murray (Wash.) said.

And Sen. Charles Schumer said a plan from the Republican Study Committee in the House to slash $2.5 trillion over a decade from the domestic budget “would have disastrous consequences.”

At a press conference, the New York Democrat displayed a chart showing 4,000 FBI agents, 3,000 food safety inspectors and 6,000 nuclear safety inspectors would be cut.

All told, “a million jobs would be affected,” Schumer charged, adding that if Republicans really cared about the deficit, they wouldn’t continue to support tax cuts for the wealthy.

Conrad, one of the Democrats’ chief budget hawks, also said he does not support immediate cuts. He noted that the bipartisan commission and many economists, including Federal Reserve Chairman Ben Bernanke, suggest waiting until the economic recovery is on sounder footing in 18 months or two years before enacting tougher budget medicine.

“The recovery is fragile,” Conrad said. “What really matters is adopting a plan now. We need to keep our eyes on the prize.”

Conrad said that, in his judgment, various pieces of a potential deficit compromise — including tax reform, discretionary spending caps and entitlement reforms, need to be in the same overarching package.

“It’s got to be a grand compromise,” he said. “Nothing can be sacrosanct. Nothing can be excluded.”

Conrad also called on Obama to do more to educate the public on the need for a major package, given the fact that many of the things he said need to be done — including cutting the cost of Medicare, Social Security, defense and other programs — don’t poll well.

“There’s got to be leadership to help persuade the American people,” he said.

Durbin, who also voted for the fiscal commission plan, said he’s still working to reach a bipartisan deal.

Durbin predicted — to his own dismay — that the 112th Congress would not have any earmarks after Obama vowed to veto any bills with them Tuesday night.

“I love this president, but he’s just plain wrong on this,” Durbin said.

Durbin noted that Speaker John Boehner (R-Ohio) has vowed to oppose earmarks as well.

“I don’t think the president will have to use his veto pen,” he said.

That didn’t go over so well with Murray, who said she wouldn’t give up her right to try to help her state.

Murray, who is also a senior appropriator, questioned how Obama would define earmarks and whether it would apply to tax and authorizing bills as well.

“Is the president going to veto every bill that comes over here because there’s a defined item in it?” she asked. “It’s a slippery slope.”

The two parties, meanwhile, agreed on who will referee the budget talks. CBO Director Douglas Elmendorf was appointed to a full four-year term in office. He took over from Peter Orszag in January 2009 when Orszag left to become Obama’s first budget chief.

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