Obama to Create Deficit Panel as U.S. Debt Soars AP
The federal deficit spiked to an extraordinary $1.4 trillion last year and could top that figure this year as the struggling economy puts a big dent in tax revenues.
print email share recommend (5) WASHINGTON -- Determined to have a deficit commission with or without Congress' backing, President Obama plans to announce on Thursday that he is establishing a panel similar to -- although weaker than-- the one lawmakers rejected.
Former White House chief of staff Erskine Bowles and former Republican Senate Whip Alan Simpson would lead the panel, a senior administration official said Tuesday. The official spoke on the condition of anonymity because the president's executive order creating the National Commission on Fiscal Responsibility and Reform had not been announced.
The deficit spiked to an extraordinary $1.4 trillion last year and could top that figure this year as the struggling economy puts a big dent in tax revenues. Even worse from the perspective of economists and deficit hawks, the medium-term deficit picture is for deficits to hit around $1 trillion a year for the foreseeable future.
Obama and his economic team have said repeatedly that this is not sustainable. He told lawmakers during his State of the Union address that he would go around their vote and appoint a version of a deficit commission.
Obama's version of the commission is a weak substitute for what he really wanted: a panel created by Congress that could force lawmakers to consider unpopular remedies to reduce the debt, including curbing politically sensitive entitlements like Social Security and Medicare.
As rejected, the bipartisan 18-member panel would have worked for much of the year and, if 14 members agree, report a deficit reduction blueprint after the November elections that would be voted on before the new Congress convenes next year. The 14 would have to include at least half of the panel's Republicans.
That idea crashed in the Senate, defeated by equal numbers of Democrats and Republicans -- some of whom initially supported the idea.
Although Obama's commission will lack any requirement for Congress to act on its advice, it will provide some political cover and big-name backing.
Bowles, the president of the University of North Carolina, served as Democratic President Bill Clinton's chief of staff from 1996 to 1998. Simpson, a senator from Wyoming from 1979 to 1997, was the No. 2 Republican and the top GOP member of the Social Security subcommittee.
Obama planned to announce the plan on Thursday before he heads west for political events in Colorado and Nevada.
