Commission Votes On Deficit-Slashing Proposal

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The National Commission on Fiscal Responsibility is voting Friday on a plan to cut the federal deficit. Among other things, the plan would raise the Social Security retirement age and scale back some popular tax deductions. David Wessel, economics editor of The Wall Street Journal, talks to Steve Inskeep about what options are on the table.

STEVE INSKEEP, host:

Now, even as Yuki's been talking with us, a television has been on in the corner here. We've had an eye on members of President Obama's deficit commission - Republicans and Democrats alike. They're holding their final vote on a plan to reduce to the huge annual budget shortfalls the United States faces, reduce them over the next several years. A majority of the 18 members seems to be voting in favor a mix of tax increases and spending cuts, but they seem to be falling short of the 14 of 18 votes they wanted. The yes votes include Democratic Senator Richard Durbin, who said much of this plan pains him, but he wants to help the process.

Senator RICHARD DURBIN (Democrat, Illinois): Fourteen is just a number. But I think you have done more than reach a number. You have inspired us to do what we need to do for future generations. I got an email from my son this morning, and for a father in this business, there's nothing better. And he said thanks -thanks for your grandchildren, and thanks for your family.

INSKEEP: Richard Durbin, speaking to his colleagues on the 18-member deficit commission.

Let's talk now with David Wessel. He's economics editor of The Wall Street Journal. He's on the line once again.

David, good morning.

Mr. DAVID WESSEL (Economics Editor, The Wall Street Journal): Good morning, Steve.

INSKEEP: Okay, if they fall a little short of 14, but they still - most of them vote on something, does it matter?

Mr. WESSEL: Yes, it matters. Look, the 14 number was in President Obama's executive order as a way to kind try and get a supermajority. But frankly, a few weeks ago, nobody thought that they would get 11 or more votes for a plan that's tough as this one, which cuts a lot of spending, raises taxes and gores about every ox in Washington. So I think what it illustrates is there's a mounting concern about the deficit, even if there's a pretty elusive consensus on what to do about it.

INSKEEP: Although it's interesting, when we listen to Richard Durbin - the Democratic senator who rather dramatically voted yes here - if I don't misunderstand his statement, he said: I'm going to vote yes for this now. But if this specific plan came up before the United States Senate, I'd be voting no - an indication that there are still some difficult fights ahead if anybody's going to make any of this law.

Mr. WESSEL: Oh, yeah. Absolutely. I mean, look, it doesn't cut spending enough for the Republicans, and it doesn't raise taxes enough for a lot of the Democrats. It does things to Social Security that makes some defenders of Social Security uncomfortable. It puts caps on appropriated spending, which is where all the investment spending is for anything that anybody thinks the government ought to do, which is why union leader Andy Stern put forward his own plan that had more investment spending. Other plans say we ought to cut defense more rapidly. The Republicans don't like some of the changes to taxes. So this is just the beginning of a conversation, not the end of one.

INSKEEP: Well, let's listen to one of the no votes on the deficit commission today. This is Representative Xavier Becerra speaking a short time ago.

Representative XAVIER BECERRA (Democrat, California): I was trying to figure out if there was a way that I could get to a yes, as I had said the chairman before. Because for all the reasons that I think my friend and colleague Dick Durbin said that he's a yes, I think it's appropriate for all of us to consider wanting to be a yes. I'm going to be a no.

INSKEEP: He's going to be a no. The Republicans have concerns about the tax increases here. Democrats do have concerns about the spending increases, changes to Social Security - an indication of many battles ahead once again.

Mr. WESSEL: That's correct. And a lot of this is pretty fundamental, disagreements about: How large should the government be? What should government do and what should it not do? Who should pay for it? How shall we distribute the burden? What - how shall we distribute the benefits of government spending between taking care of old people and sick people today, versus investing in education and highways that pay off in the future?

And there isn't a consensus on those fundamental things, so it's not surprising there's a disagreement on the policies.

INSKEEP: Is it strange to have this debate now, when everybody acknowledges -pretty much - that the government has to keep on doing huge deficit spending just to keep the economy afloat?

Mr. WESSEL: Yeah, it is, I think. I think what's going on is that people worried that, in the future, we're going to have a big problem if we don't do something about this now. But I think the jobs report will add to the case that's made by Ben Bernanke - the Fed chairman, among others - that the smartest thing to do now is to do some long-term deficit reduction that's credible, lock it in, takes effect later, and that'll give them some political and financial room to maybe do a little more stimulus for the economy today -for instance, maybe a payroll tax holiday to try and get hiring going again.

INSKEEP: David, it's always a pleasure to talk with you.

Mr. WESSEL: You're welcome.

INSKEEP: That's David Wessel, economics editor of the Wall Street Journal.

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