Deficit panel must confront alternate realities

Sep 14, 2011, 12:59 p.m.
Congressional Super Committee member Sen. Jon Kyl (R-AZ) carries a binder titled Budget Policy Options as he departs the inaugural meeting, as the members search for at least $1.2 trillion in new deficit reductions, in Washington, DC, September 8, 2011. REUTERS/Mike Theiler

Current law rightly assumes those temporary exemptions will expire, so analysts in turn must assume that billions of dollars in additional revenues will be collected once that happens. But the rub is that they know Congress is not likely to let that happen.

So if the super committee wants to accept reality and assume the middle class will continue to dodge the AMT bullet, that means there are tens of billions of dollars in lost revenues that they have to take into account in their $1.2 trillion deficit-reduction effort.

If they don't acknowledge the political reality, they have in effect achieved those billions in savings without breaking a sweat -- and would be in keeping with current law.

Similarly, current law calls for 30 percent cuts soon in payments to doctors participating in the Medicare healthcare program for the elderly, Horney noted. James Horney, a fiscal policy expert with the Center on Budget and Policy Priorities.

But fearing that those doctors would just drop out of the program rather than suffer the pay cuts, Congress has been doing regular fixes to stave off the cuts.

Again, should the super committee use current law and assume around $300 billion in deficit savings over 10 years from the lower payments to doctors, or should it face up to political realities, assuming the $300 billion will never materialize, thus making for a tougher spending-cut path.

And the same goes for how to count ongoing war costs, Horney said. Should the super committee use a baseline that looks at annual spending in Iraq and Afghanistan, or should it use one that assumes combat troops will withdraw, as President Barack Obama intends, making for less Pentagon spending.

Democrats' embrace of the lower spending during the budget debate this summer drew criticisms from Republicans, who accused them of claiming false savings.

(Editing by Jackie Frank)

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