Short on votes, US deficit panel paints grim view

* Final report due on Wednesday, news conference Tuesday

* Report likely to miss 14-vote threshold -aides, analysts

* Commission’s work highlights tough budget choices ahead

By Kevin Drawbaugh

WASHINGTON, Nov 30 (BestGrowthStock) – A presidential commission on
balancing the U.S. budget likely will fail on Wednesday to
secure enough support for its deficit-cutting plan to trigger a
congressional vote on it, aides and analysts said.

With just a day left before it releases the plan, the
commission’s co-chairmen were still scrambling to nail down 14
votes among the commission’s 18 members — a super-majority
threshold called for when the panel was created in February.

“We do not think that the commission’s report will get 14
votes,” said Brian Gardner, a Washington policy analyst at the
investment firm of Keefe Bruyette & Woods.

After months of meetings and debate, the commission’s work
has painted a harsh picture of the fiscal choices ahead for the
United States, while also showing starkly how difficult it is
to achieve bipartisan consensus on facing up to them.

The commission will hold a news conference on Tuesday led
by its co-chairmen, who released a draft plan on Nov. 10 that
urged spending and benefit cuts and a tax overhaul to reduce
the deficit to 2.2 percent of gross domestic product by 2015.

Working from that draft, the co-chairmen — former
Republican Senator Alan Simpson and Erskine Bowles, former
chief of staff to Democratic President Bill Clinton — have
sought a compromise acceptable to 12 other commission members.

The shape of their work so far may emerge at the news
conference, but the full details were likely to remain in flux
until the panel’s final meeting on Wednesday, aides said.

The $1.3-trillion deficit, near levels not seen since World
War II, adds annually to the fast-rising national debt. Voters
vented their concerns about Washington’s red ink earlier this
month, while financial markets have registered little worry.

Investors continue to pour money into U.S. Treasury bonds.
With another sovereign debt crisis — this time in Ireland —
rocking Europe, U.S. debt still looks like the world’s safest
capital haven, though budget hawks warn this could change
quickly if markets lose faith in U.S. credit-worthiness.


Fourteen members of the presidential commission must back
the final plan to bring about a congressional vote on it. That
could still happen, but there was widespread skepticism.

Three senior congressional aides — two Democrats and a
Republican — said they did not expect 14 votes in support.
Others downplayed the importance of crossing the super-majority

“I don’t think 14 (votes) matters,” said Maya MacGuineas,
fiscal policy director at the New America Foundation, a think
tank. “A credible large-scale plan that receives some amount of
bipartisan support will be the critical first step on …
switching from the period of ‘deficits don’t matter’ to ‘how
are we going to fix the deficit?'”

The National Commission on Fiscal Responsibility and
Reform, the panel’s formal name, was set up by President Barack
Obama to find ways to balance the budget, excluding interest
payments on the debt, by 2015 and “meaningfully improve the
long-run fiscal outlook.”

Obama underscored his deficit concern on Monday by calling
for a two-year freeze on civilian U.S. federal worker pay. He
was expected to meet with congressional leaders on Tuesday to
discuss tax issues holding center stage in Congress through the
end of the year. No substantive legislative action is expected
this year on the deficit.

Whether Congress tackles it next year will depend in part
on the Bowles-Simpson commission’s result. That will be decided
not just by how many, but whose votes back the plan, said
Michael Linden, associate director for tax and budget policy at
the Center for American Progress, a think tank.


The commission has six members who are not in Congress and
12 who are, including powerful Senate Budget Committee Chairman
Kent Conrad and Senate Finance Committee Chairman Max Baucus,
both Democrats. Republican Representative Dave Camp, expected
to be the next chairman of the tax-writing House of
Representatives Ways and Means Committee, is also a member.

“I could imagine a scenario in which they get 11 or 12
votes,” Linden said. “If they do that with, say, all six
non-elected members and three Republicans and three Democrats,
that could be pretty powerful. If they get only seven or eight
(votes), I think it will be less influential.”

The debt is projected to rise in fiscal 2011 to 68.6
percent of gross domestic product. That level would surpass
Britain’s projected debt-to-GDP ratio of 61.9 percent, but
still be well below France’s ratio of 86.5 percent.

Greece, hammered earlier this year by bond markets, is
struggling to tame a debt load forecast at 139.4 percent of GDP
next year, while Japan’s debt is expected to top 235 percent of
GDP for 2011, said International Monetary Fund forecasts.

Expectations for the commission have always been low, but
some analysts said it may have long-term political meaning.

“The commission does underline a grim sense in Washington
that difficult choices are coming next year,” said James Lucier
and Robert Kaminski, policy analysts for advisory firm Capital
Alpha Partners, in a research note.

(Additional reporting by Andy Sullivan and Kim Dixon;
Editing by Will Dunham)

Short on votes, US deficit panel paints grim view