Panel Tasked With Getting The Country Out Of Debt
RENEE MONTAGNE, host:
Talk about tough challenges - in Washington D.C. there's a new commission with a seemingly impossible task: figuring out how to tame the federal debt. President Obama says all options are on the table. He ordered the commission to study the problem after the Senate refused to set up a similar panel that might have actually forced action by the government.
NPR's Scott Horsley explains.
SCOTT HORSLEY: The 18 members of the new fiscal commission had barely sat down for their first meeting when they got a stern warning from the chairman of the Federal Reserve. Ben Bernanke says unless the federal government gets control of its mounting debt, the U.S. will face higher interest rates, and eventually the threat of a crippling loss of confidence.
Dr. BEN BERNANKE (Chairman, Federal Reserve): Achieving long-term fiscal sustainability will be difficult, but the costs of failing to do so could be very high.
HORSLEY: Robert Reischauer has spent decades studying the government's red ink, as former director of the Congressional Budget Office. He told the commissioners there's no easy fix.
Mr. ROBERT REISCHAUER (Former Director, Congressional Budget Office): Don't waste time looking for silver bullets or new approaches that hold out the promise of painless sacrifice. There are none to be found.
HORSLEY: Most experts say getting a handle on the federal debt will require an unpleasant combination of cuts to popular programs - such as Social Security -and broad-based tax increases. Congressional Democrats typically resist the spending cuts, while Republicans fight the tax hikes.
President Obama promised during the campaign not to raise taxes on any family making less than a quarter million dollars a year. But yesterday, Mr. Obama refused to rule out any deficit-reducing option.
President BARACK OBAMA: That's an old Washington game, and it's one that has made it all but impossible in the past for people to sit down and have an honest discussion about putting our country on a more secure fiscal footing. So I want to deliver this message today: We're not playing that game.
HORSLEY: With the president insisting all options are on the table, activists on the left and the right are sounding preemptive alarms. Co-chairman and former Wyoming Senator Alan Simpson tried to defend the commission from attacks by his fellow Republicans.
Mr. ALAN SIMPSON (Co-Chairman, National Commission on Fiscal Responsibility and Reform): The minute we hit it, the shriek went up, ugh, here they are. They're stalking horses for taxes. Well, I can tell, were stalking horses for our grandchildren.
HORSLEY: Any recommendations by the commission must be approved by 14 of the 18 members, and even then they're nonbinding. The commission could provide some political cover for lawmakers casting difficult votes. But the first meeting showed how hard it may be to reach any consensus.
Illinois Democrat Jan Schakowsky argued the government can't afford to cut spending on Social Security, while Texas Republican Jeb Hensarling insisted higher taxes would downsize the American dream.
Still, commission members promised to keep open minds. Co-chair Erskine Bowles said nobody believes the government can continue on its current path.
Mr. ERSKINE BOWLES (Co-Chairman, National Commission on Fiscal Responsibility and Reform): We're on autopilot right now. And if we don't face up to these deficits, we will have a tremendous economic crisis. So we all get it. Now, do we have the courage to do something?
HORSLEY: The commission meets again next month. Its recommendations are due in December, after the midterm elections.
Scott Horsley, NPR News, the White House.
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