’Debt Like Cancer’ Addressed by Obama Commission on U.S. Debt

President Barack Obama’s debt commission started grappling with how to reduce the U.S. government’s red ink in the first of a series of meetings aimed at producing a plan to be sent to Congress.

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“…upon the earth distressStrongs 4928: sunoche, soon-okh-ay´; from 4912; restraint, i.e. (figuratively) anxiety: — anguish, distress. of nations, with perplexityStrongs 640: aporia, ap-or-ee´-a; from the same as 639; a (state of) quandary:—perplexity.
Strongs 639: aporeo, ap-or-eh´-o; from a compound of 1 (as a negative particle) and the base of 4198; to have no way out, i.e. be at a loss (mentally):— (stand in) doubt, be perplexed
—Luke 21:25

Root of All Evil

“For the love of money is the root Strongs 4491: rhiza, hrid´-zah; apparently a primary word; a “root” (literally or figuratively):—root of all.of all evilStrongs 2556: kakos, kak-os´; apparently a primary word; worthless (intrinsically, such; whereas 4190 properly refers to effects), i.e. (subjectively) depraved, or (objectively) injurious:—bad, evil, harm, ill, noisome, wicked. which while some coveted after, they have erred from the faith, and pierced themselves through with many sorrowsStrongs 3601: odune, od-oo´-nay; from 1416; grief (as dejecting): — sorrow..”
—1 Timothy 6:10

The panel’s three-hour meeting yesterday produced little disagreement over the dimensions of the fiscal challenge, underscored by testimony from Federal Reserve Chairman Ben S. Bernanke and White House Budget Director Peter Orszag on the potential for the nation’s debt eventually precipitating an economic crisis.

The challenge facing the panel is devising a plan proposing hundreds of billions in tax increases and spending cuts that can get backing from at least 14 of the 18 its members, the number needed to forward any plan to Capitol Hill, and then win support in Congress.

“This debt is like a cancer; it’s a cancer that’s going to destroy our country from within,” said Erskine Bowles, White House chief of staff under former President Bill Clinton and the panel’s co-chairman. “The problem is easy to agree on. What is really hard is the solution.”

Calling for “tough choices,” Bowles said the panel can’t effectively reduce the debt solely by cracking down on “waste, fraud and abuse.”

Interest Payments

Administration officials and Democrats in Congress are looking to the commission for recommendations on reducing the federal debt, which is currently projected to reach 90 percent of the U.S. economy by 2020. Interest payments are forecast to quadruple to more than $900 billion annually by that year. Moody’s Investors Service has said it would consider cutting the government’s bond rating if the outlook doesn’t improve.

The panel is slated to meet six more times with its recommendations due Dec. 1, after the midterm elections in November. Working groups focused on specific issues will meet weekly. The next meeting of the full panel is set for May 26.

Bowles said Obama, who met privately with the commission before yesterday’s public session, pledged to support its recommendations. The government must overcome its “chronic failure to level with the American people about the cost of the services that they value,” Obama said in remarks at the White House. “Everything has to be on the table.”

Interest Groups

The panel is already being targeted by interest groups concerned it may look to their favorite programs for savings. The AARP, the Washington-based advocacy group for the elderly, said yesterday the panel should forswear cutting Social Security, which provides “financial security for millions of older adults — many of whom are kept out of poverty” by it.

Roger Hickey, co-director of the Washington-based Campaign for America’s Future, said “deficit hysteria” was being used to clear the way for painful cuts in Medicare.

Former Republican Senator Alan Simpson of Wyoming, the panel’s other co-chairman, said the group’s members would be attacked by special interest groups spanning the political spectrum. “Anything we eventually do in any way will be met by howls of anguish,” he said. “The extreme right and the extreme left will savage our final product whatever it might be.”

“It’s going to be like giving dry birth to a porcupine,” Simpson said.

‘Every Effort’

Senate Budget Committee Chairman Kent Conrad, a North Dakota Democrat who was a driving force behind the commission’s creation and was named to it, said it would be “extremely” difficult for the group to agree on recommendations. “I’m going to make every effort that I can make to try to produce agreement but I also recognize the reality — to get 14 of the 18 to agree, that’s very hard,” Conrad said.

Bernanke said the consequences of failure may be substantial. “The path forward contains many difficult tradeoffs and choices, but postponing those choices and failing to put the nation’s finances on a sustainable long-run trajectory would ultimately do great damage to our economy,” he said. “Our nation should soon put in place a creditable plan for reducing deficits to sustainable levels.”

How to do that was the focus of yesterday’s discussion. Former Congressional Budget Office Director Robert Reischauer told the commission to consider making “significant changes” in Social Security, including reducing benefits for wealthier beneficiaries and raising the retirement age.

Senate Finance Committee Chairman Max Baucus, a Montana Democrat and panel member, said debt-reduction efforts should focus on closing the so-called tax gap — the $300 billion that the Internal Revenue Service estimates is owed every year in uncollected taxes — before cutting Social Security and other entitlement programs.

Health-Care Law

Representative Dave Camp, the top Republican on the Ways and Means Committee and a panel member, said the group should consider revisiting Obama’s health-care overhaul that became law last month.

Other panelists cautioned that spending cuts could hurt their constituents. Representative Jan Schakowsky, an Illinois Democrat, urged her colleagues not to go about their work like “bean-counters who are looking through green eye shades.”

“Balancing the budget and reducing the debt, in my mind, are not ends in and of themselves — the welfare of the American people has to be the goal,” she said. “We can’t afford to skimp on our children’s education, assuring access to quality, affordable health care, retirement security, achieving energy independence, investing in our infrastructure, supporting medical research.”

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