Q+A:How would a commission fix the U.S. budget crunch?

By Andy Sullivan and Caren Bohan

WASHINGTON, Feb 16 (BestGrowthStock) – President Barack Obama will
sign an executive order on Thursday establishing a bipartisan
commission to tackle stubborn U.S. budget deficits, a senior
administration official said on Tuesday.

Experts say the time may be ripe for such a panel though
many are skeptical Washington has the stomach right now for the
remedies needed to address the spiraling deficits and debt.


U.S. debt has more than doubled over the past decade to
nearly $12.4 trillion, thanks to a combination of tax cuts,
wars in Iraq and Afghanistan, an expensive prescription-drug
benefit and the deepest recession since the Great Depression of
the 1930s.

The government posted a record $1.4 trillion deficit for
the fiscal year that ended Sept. 30, 2009, and deficits are
projected to remain stubbornly high over the coming decade as
costs for retirement and healthcare programs rise.

This could spur investors including China, the biggest U.S.
foreign creditor, to demand higher rates for Treasury bonds,
pushing the government’s borrowing costs dramatically higher
and crowd out spending in other areas.


Commissions are a time-honored Washington method of
outsourcing difficult decisions. Budget hawks, including many
lawmakers, say Congress has shown that it lacks the political
will to get the budget under control.

Commissions have allowed Congress to close outdated
military bases over the past two decades and shore up Social
Security in the early 1980s.

Far more find their proposals simply gather dust.

“Typically what happens with commissions is nothing,” said
Stan Collender, a budget expert at Qorvis Communications who
served on a panel during the 1990s to study whether the United
States should create a special budget for capital expenditures.


The White House’s preliminary proposal calls for 18
commissioners: 6 congressional Democrats, 6 congressional
Republicans, and 6 appointed by the administration.

Congressional leaders would name the lawmakers on the
panel. Likely members include the top lawmakers on the House
and Senate Budget committees.

The commission would have most of the year to come up with
recommendations to get the budget under control, and could
present them to Congress after the November 2010 elections,
when lawmakers presumably are feeling less pressure to pander
to voters.

Democratic leaders in Congress have promised the White
House that they will bring the commission’s findings up for a


The commission faces several hurdles. First, the White
House and congressional leaders must appoint members who are
viewed as credible by Washington policymakers and willing to
sign off on what is likely to be an unappetizing set of

Second, it must withstand fierce lobbying by interest
groups on the left or the right, which fear that it could
recommend tax increases or cuts to favored programs.

Finally, it will have to win approval in Congress.

The Senate defeated a proposal to set up a commission on
its own last month after seven Republicans who had backed the
plan voted against it, and lawmakers are not likely to be more
receptive to a White House-backed commission in which they have
no personal stake.

“The president would have stood a greater chance of
success, but would have faced more personal political risk, by
announcing an informal process — inviting the Republican
leaders into the Cabinet Room to negotiate, and in effect
daring them not to show up and to bargain in good faith,” said
Joe Minarik, a former budget official under President Clinton.

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(Editing by Jackie Frank)

Q+A:How would a commission fix the U.S. budget crunch?